The IRS defines fair market value as the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act and both having reasonable knowledge of the relevant facts.
| IRS Publication 561 |
Factors that affect the fair market value of an item include: condition, style, use, and age. ItsDeductible considers these factors together as contributing to an item's value.
You also need to consider the length of time you have owned an item.|
Items Owned
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Deduction Can Be
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| Less than one year | No more than the original price paid |
| More than one year | Generally at the fair market value (Consult IRS publication 526 for certain exceptions.) |
| Show Examples |
According to the IRS, there are no fixed formulas for determining the fair market value of your items, other than to know what similar goods are being bought and sold for.
The IRS recommends that you visit stores that sell used goods (such as thrift and consignment stores) and see what similar items are selling for to determine the fair market value for your donations.
ItsDeductible accomplishes this by aggregating information from various thrift and consignment stores.