IRS to define 'good' condition for donations

As part of the recently signed pension bill, the Treasury Department and the Internal Revenue Service will have to better define what constitutes "good" condition for donations of clothing or household items.The IRS can deny deductions for donated items such as furniture, appliances, linens or electronics if the items aren't in appropriate condition.

Any significant household item valued at more than $500 must now be appraised before the taxpayer can take a deduction. Another new rule requires that taxpayers who deduct cash donations have a receipt or bank record, such as a canceled check, to prove that they made the gift.