Downsize, Donate, Deduct: Helping Clients to Move
If you're a real estate agent who likes to go the extra mile to help a client, a timely service you can offer is helping them with the cleaning out and de-cluttering that is often a part of a move. Whether they've become empty nesters and are moving into a smaller house or they're relocating from a house in the suburbs to an apartment in the city, people who are downsizing often find it difficult to decide what to keep and what to discard. Suggesting ways to get rid of the surplus is a really useful service realtors can offer, and December is a great time to do it. If your clients decide to make tax-deductible donations to a charitable organization, December 31st is the deadline for items to be donated and receipted in order to claim deductions for that year.
Sorting Out the Clutter
Homeowners tend to accumulate a lot of possessions over the years, and the prospect of slimming down their belongings to fit into a smaller dwelling can be daunting. Many professional organizers recommend that you begin the de-cluttering process by sorting items into three piles: keep, donate or give away, and trash. Hopefully, in this age of being friendly to the environment, the trash pile won’t be too big since most items can be donated, and if they can’t, the items should be recycled if at all possible.
When clients are deciding what items to keep, a good question to ask is: "Have you used this or worn this at all in the past year?" If the answer is no, that item should probably go in the donate pile. Tactfully suggest that it might not be worth paying to move that exercise bike to the new home if the clients have never actually ridden it. Also, remind clients that this is a good time to start passing down family treasures and heirlooms to their kids and grandkids.
Donate and Do Good
Giving away items to charitable organizations is a great way to downsize. Your clients' clutter goes to a worthy cause and the clients get a tax deduction! Once the sorting has finished, the clients should make a detailed list of the items to be donated. Any organization that is registered with the IRS as a 501(c)3 can give receipts for tax purposes and there are many that accept donations of clothing, furniture and household items. Unless your clients have a favorite cause that they want to benefit, you can suggest organizations that provide free pick-ups. For instance, the Vietnam Veterans of America--California offers free pick-ups in Northern California. Pick-ups can be scheduled online at
http://www.donationtown.org/charity/vietnam-veterans-of-america-california.html. The Salvation Army also offers free pick-ups in Northern California and they accept household items, clothing, and furniture as well as donations of electronics such as computers and DVD players. You can schedule Salvation Army pick-ups online at
http://www.satruck.com/. Be sure to remind your clients to request an official receipt from the organization to which they are donating.
Give the Gift of Reading
Books may be slightly harder to place than clothing or furniture: most of the charities that make pick-ups will accept small numbers of books but if the de-cluttering process produces several boxes, you may need to think of an alternative. Check if the local library takes donations of books and if they are willing to give receipts for them. Local hospitals and senior centers are usually more than happy to get donations of books in good condition. Better World Books, an organization which has raised more than $13 million for literacy programs and libraries, provides prepaid shipping for anyone donating books; just print out the shipping label from their website at
http://www.betterworldbooks.com/donate.aspx.
Tax-Deductible Donations
You should advise your clients to keep the receipts they receive from each group to which they donate together with the itemized lists of what's been given away. It's up to the donor to assess the fair market value of the items that have been donated. The IRS has a useful brochure, Publication 561, "Determining the Value of Donated Property", that you can access online here:
http://www.irs.gov/publications/p561/index.html. If a taxpayer wants to claim a deduction for an item valued at more than $5,000 the taxpayer will usually need to have the item appraised first by a qualified appraiser. Working with an accountant can be useful for taxpayers claiming deductions for charitable donations. Use our Services Directory at
http://www.bizpals.com/directory/legal-accounting-insurance-and-finance/accountants if you need a referral for an accountant to help your clients with their returns. And maybe you'll be inspired to clean out your own closets and garage this month and donate items you don’t need or use anymore to a good cause!
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