On Saturdays, my wife disappears for several hours and then returns with various inexplicable bargains.
For example, today, she brought back a dog crate in perfect condition. We looked at new ones the other day and they were $60. She paid $10 for this one. And then, she brought back a child’s coat that would cost maybe $25. She paid $0.50.
I have to wonder why people do yard sales if they plan on giving stuff away. If you are going to give stuff away, why not just donate it to Goodwill? Ironically, you will make more money and not have to sit outside in the heat.
Here is how it works:
- Make a list of what you are giving away.
- Drop it off (or have the charity pick it up) and get a receipt.
- Claim fair market value on your taxes. If you use software like TurboTax, it is now incredibly easy to come up with fair market value. If you use their numbers, you should be safe from the IRS and you would be amazed at how generous their numbers are. For example, TurboTax values that coat my wife paid $0.50 for at $7-$10.
You have to know what your highest income tax bracket is to know how much money you will save. Let’s say it is 15% and let’s say your state income tax rate is 5%. If you value the coat at $8, your tax saving is $1.60.
Speaking for me, I would take the $1.60 with no work than sit in 90 degree heat for $0.50 (assuming the item even sells). I am trying hard to figure out where my logic is wrong. Can someone enlighten me?
But please don’t stop doing yard sales. My wife loves them and I want her to be happy.