If you're donating furniture to charity, selling it or distributing it to the heirs of an estate, you may need to determine the fair market value of the furniture. You will approach the task differently depending on whether the furniture is antique or has been purchased within the last several years. Does this Spark an idea?
Instructions
1. Hire a qualified appraiser if you need to find the fair market value of antique furniture. This person can provide you with documentation estimating the furniture's value.
2. Adopt a rule of thumb whenever you need to determine the fair market value of furniture that is not antique. Most furniture has a life expectancy of about five years, although some pieces may last considerably longer. Just like a new car, furniture loses value as soon as it leaves the store. Consequently, by depreciating furniture by 20 percent per year for four years, and 5 percent for each of the next four years, you can justify a reasonable fair market value of most furniture. This method is very useful if you must determine the value of furniture to be distributed by an estate.
3. If you give your furniture to a charity, note that you cannot take a deduction on your federal income tax return unless the furniture is in good condition, because it has little value if it is worn or out of style. Per Internal Revenue Service (IRS) guidelines that became effective on August 17, 2006, any deduction for household goods given to charity above $500 must be valued by a qualified appraiser. This applies to both antique and recently purchased furniture. The appraisal must address the furniture's condition and authenticity, along with an estimate of its value. Not withstanding such documentation, the IRS can question the size of your donation and require more evidence supporting its value.
4. Check listings of furniture on eBay.com. Not only can you find prices for furniture that are currently listed, you can also see what certain pieces sold for in the past month by going to "advanced search."
5. Sell used furniture on Craigslist.org. Once you have established a value for your furniture, you can go to this website, find your city and advertise items for sale. The beauty of this website is that potential buyers live near you, making delivery less of an issue. You can also sell used furniture at furnituretrader.com.
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