Ask The Taxgirl: Wedding Dress Donations

Taxpayer asks:

Hi Taxgirl,

Like many women this year, I got married and now I would like to donate my dress to charity. What do I need to do for tax purposes? I paid 1000 for it new and only wore it once. It is in good condition. Do I need it appraised? I still have the receipts. If I send it to a charity, can I deduct the mailing cost? And can I deduct the cost of drycleaning it before I send it to the charity? Also, the charity resells the dresses at an auction/fundraiser and charges a $40 “processing” fee to help cover their expenses. Is this deductible?

Thanks for answering this question, I bet a lot of brides will appreciate your answer!

The new Mrs’s

Taxgirl says:

What a great idea!

Generally, you can deduct the fair market value of property donated to a qualified charitable organization. When it comes to clothing, the clothing must be in good used condition or better – it sounds like your dress is nearly perfect.

Usually, the fair market value of used clothing is considerably less than the original price. Usually, you’ll opt for the “thrift store” value of the clothing – what you’d pay for the same item in a thrift store or on consignment.

In this case, however, you will need a written acknowledgment from the charity and, quite possibly, an appraisal. I’m not sure what the value of the dress would be, but assuming that it’s over $500, you’ll want a written determination of the value of the dress (an appraisal will do).

You can’t deduct the cost of dry cleaning the dress but I will say that I’d do that prior to an appraisal. The better an item looks, the higher it’s likely going to be valued. I’ve found this to be true with respect to a lot of artwork. Once cleaned or repaired, the value went up substantially.

Unfortunately, the fees for the appraisal are not deductible as a charitable contribution. But you can claim them as a miscellaneous itemized deduction on Schedule A; they will be subject to the 2% rule.

I think there *might* be an argument on the postage front as an out-of-pocket expense but, personally, it’s not an argument that I’d love to make considering the relatively small benefit. Out-of-pocket expenses as charitable deductions are generally associated with volunteer time (when you can’t take a deduction for the time) or when you incur fees for the convenience of the charitable organization (i.e. you buy postage on your own dime for mailers). In this instance, technically the postage is for your convenience. I’d ask your tax pro for their opinion but if it were me, I’d be inclined to say no to this one.

With respect to the “processing fee”, I think it depends on the description and exact purpose of the fee. I’d check with the charity directly for that one.

I think it’s wonderful that you’re going to do something charitable with your dress rather than stuff it into a closet. Good luck!

Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
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Kelly Phillips Erb

Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.

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