How do I record an in-kind donation for tax purposes?

Question

I donated goods to a charity worth enough to want to claim on my taxes.  How do I record this?

Greg_the_Geek · Accepted Answer

Use the category Gifts & Donations:Charity. It goes to the correct tax line item on Schedule A.

Tom Young · Accepted Answer

If you happen to have these "goods" recorded on your balance sheet in some sort of Asset Account - "Furniture & Fixtures", say - then the accounting entry would be along the lines of 
Debit (increase) Charitable Donations Category   $XXX
Credit (decrease) Furniture & Fixtures Account    $XXXOf course you can only claim the lesser of cost or fair market value for in-kind donations and assuming the fair market value of the items is less than the cost recorded in your Account, the full and complete entry would be more along the lines ofDebit (increase) Charitable Donations Category               $XXXDebit (increase) Loss on Charitable Donations Category $YYY   
Credit (decrease) Furniture & Fixtures Account                $ZZZ
where $ZZZ (original cost) - $YYY (loss) = $XXX (FMV of donation)
If the goods you donated were expensed when you purchased them then the accounting entry would be along the lines of

Debit (increase) Charitable Donations Category                          $XXXCredit (decrease) Various Expense Categories previously used  $XXX
or, easier
Debit (increase) Charitable Donations Category  $XXXCredit (decrease) Miscellaneous Expenses         $XXX
As with the first example above you could make this even more difficult, recording the difference between the original expenses and the current "fair market value" expense as some sort of "loss".
I, personally, have tended to expense most purchases of "goods", like pieces of furniture, tools, etc. and when I donate them I make NO Quicken entry, recognizing that sometimes the effort to get things "perfectly correct" from an accounting standpoint simply isn't worth the effort.  I make a list on a piece of paper of the donated items and my estimate of FMV and simply use that when I prepare my income tax return.

Tom Young · Accepted Answer

The very easiest way to do this is to create an offsetting Category to your charitable contributions entry and simply omit that offsetting Category from the tax report to the accountant.

Jim_Harman · Accepted Answer

Adding one more approach, which works well enough for me:

I have an Asset account in Quicken called "Household goods." I set the opening balance equal to a rough estimate of the value of the stuff I own. This account is included by default in my net worth.

When I give an item to charity, I record the payee and a decrease in this account equal to the fair market value of the item. I use an expense category that is set to the tax line item of "Schedule A: Non-cash charity contributions". The value of these donations is included in Quicken's tax reports.