Ordinary income property
Donated property whose sale would not have produced long-term capital gain. Its deduction is generally reduced below fair market value.
Publication 526 separates donated property into categories and explains that for some of them the deduction must be reduced below fair market value. Property that would not have produced long-term capital gain if sold, including inventory and property held for a short period, is generally in that group.
Read the publication's section on giving property before claiming full fair market value on anything unusual. For used household goods the practical outcome is the same either way, because their fair market value is already well below cost.
Sources
- Publication 526 (2025), Charitable Contributions, full textIRS, IRS publication
Definitions describe the rule as published. They are not tax advice, and almost every threshold above has an exception attached to it in the underlying publication. Confirm anything that affects a return with a qualified tax professional.
Related terms
Capital gain property
Donated property that would have produced a long-term capital gain if you had sold it instead of giving it away.
Fair market value (FMV)
The price property would sell for on the open market between a willing buyer and a willing seller, both informed and neither under compulsion.
AGI limit (percentage limitation)
A ceiling on charitable deductions expressed as a percentage of adjusted gross income, varying by gift type and recipient.
Automatic revocation
Loss of tax-exempt status for failing to file a required annual return or notice for three consecutive years.
Values with the source attached
DeductiBee applies a cited fair-market-value range to everything you donate, keeps the photo with the record, and exports a Form 8283 worksheet when you file.
