Cash Management: Yard Sale or Donation?
October 11, 2010I have to confess that I really hate yard sales. Oh I have no problem going to other people’s yard sales to snap up bargains but I can’t stand putting them on. Like many other people especially these days, I work hard during the week and the last thing I want to do on the weekend is to get up in the wee hours Saturday morning to put little stickers on my books and glassware and set them up on tables only to have people walk up and try to haggle me down from $1 to 10 cents for my used books. “Are you kidding? This is Tolstoy! You should be paying me to read this book,” is how I handle it. So in other words, not well.
Maybe it is better to just donate the whole thing to charity and forget the yard sale. Think of it this way, you may generate a little cash at the yard sale but unless you have a team of teenagers to man the booth, you have to put in a minimum of 8 hours work. Donating to charity takes about an hours work unless you have the teenagers load up the stuff and do it for you. In my case, the teenagers are no longer living at home so let’s use 8 hours for yard sale and 1 hour for donation.
If you itemize your taxes, the IRS allows you to take a deduction because you make a charitable deduction which is a wonderful thing – an added benefit. Let’s compare –
Yard Sale – Assume you sold a bunch of little things, one book, an end table, and a sewing machine – all for $51. You are happy because you have cash in your pocket but based on your time spent, you made $6.36 per hour.
Donation – (assuming you itemize) donation of a bunch of little things, an end table and a sewing machine. The IRS has a table for valuation for your donated items, (IRS Publication 561). The bunch of little things, the book, and the end table are about the same but you are able to write off more for the sewing machine because the resale value is higher than you can get at the yard sale. Your total donation value $51. You are in a 28% federal tax bracket and a 7% state so you get $17.85 back on your taxes: It is not immediately in your pocket but you do get it back. So you just made about $18 per hour instead of $6.
Conclusion – if you need the cash and have some time on your hands, consider the yard sale. If you could make more money in the 8 hours it took you to slave away in the hot sun at the yard sale and you itemize on your tax return, consider the easy, low hassle approach I use and load up your car and head to St. Vincent De Paul with all kinds of treasures for them to resell and support the needy in your community – oh and sleep in on Saturday mornings.