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Lifestyle & Budget

Donating Jewelry: Good for Charity and Your Taxes


 (copyright 2008Sean LockeDigital Planet Design)

A Salvation Army kettle drive in Atlanta received a surprising donation this Christmas season—a diamond ring.

A couple walked up to the bell ringer and presented her with a package that included the ring and a note. The letter said the couple wished to remain anonymous and were still deeply in love, but felt the charity could make better use of the wedding ring than they could. The ring is currently being displayed at a local jewelry store where sealed bids are being accepted for the next 30 days, according to the Associated Press. The ring, a .72-carat stone, believed to be worth several thousand dollars, will be sold to the highest bidder.

Tim Raines, marketing manager for the Salvation Army, said such anonymous donations are not unheard of or even uncommon at kettle drives and Salvation Army stores.

“Every year or so, there is a story like that in the Army world, where one of the locations has received a strange or unexpected gift,” Raines said. “We are greatly dependent on the American people, and we are always excited and thankful when we get something out of the ordinary like that.”

A charitable deduction for a big-ticket item like a wedding band would only be available for those taxpayers who itemize, according to Scott Weiner, senior tax analyst with the tax and accounting business unit of Thomson Reuters. The cost of the item cannot be more than his or her overall deduction either, or else it would not be an option, he said.

A taxpayer can deduct the “fair market value” of the item at the time of the donation, which is essentially the price it would be between a willing buyer and seller. If the item is over $5,000 then it may have to get a qualified appraisal and report for records.

“For any property donation, you need a receipt from the charity,” Weiner said, in order to itemize it as a deduction. “Exactly what the receipt would say depends on the actual value of the item, but at the very least it has to have your name on it. The charity can agree to keep it quiet for anonymity, but they need to know your identity.”

It is impossible to say if big-ticket donations like the one in Atlanta are more frequent at drives or stores, Raines said. However, when donated to kettle drives, a gift like a wedding band tends to stand out more from monetary donations.

“Diamonds and jewelry are easier to spot in the midst of coins and bills,” he said. “Easier to see than the things donated in our stores, but I would guess they are donated with the same frequency.”

Follow Kate Rogers on Twitter at @KateRogersNews

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