donate inherited stuff?

[LindaB]

An elderly parent dies, the taxpayer and spouse clean out the house and donate a lot of stuff to Goodwill. Can they take the deduction on Sch. A for noncash contributions? Part of me thinks no, it is not their stuff, but part of me thinks yes, it is theirs because they inherited it.

[Pacun]

As long as you have a basis and the basis is less than what the non-profit will benefit from your items (or the FMV is more than your basis), you can deduct it.

[LindaB]

As long as you have a basis and the basis is less than what the non-profit will benefit from your items (or the FMV is more than your basis), you can deduct it.

So...if they inherit stuff, their basis is the FMV when they inherit, and if they give it right away to Goodwill, the value of the donation is the same as their basis, so there is no deduction?

[Pacun]

Yes, you can deduct it. When you donate you consider your basis, the FMV of the items or the benefit to the non-profit... you deduct the lower of the 3. In your case, since you just inherited and you give it away, your basis and the FMV are the same, so you can use either one. In most cases you compare the Basis and the FMV and the lower is of two is deductible as non-cash contribution.

If you have expensive items such as cars, you can deduct the lower of the 3.

[LindaB]

Thanks, Pacun.