The short answer: fair market value (FMV) is the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell. For used goods, that's what the item would sell for secondhand today — not what you paid, and not what it would cost to replace.

What fair market value means

The IRS defines fair market value as the price property would sell for on the open market, agreed between a willing buyer and a willing seller, neither required to act, both with reasonable knowledge of the relevant facts. For donated goods, it's the number you start from when you work out your deduction.

What it isn't

  • Not what you paid. Used clothing and household items are usually worth far less than their original price.
  • Not replacement cost. IRS guidance notes there is often no relationship between replacement cost and FMV.
  • Not what the charity prices it at. Their tag price is a data point at best, not your deduction.

How to find it for used goods

There's no fixed formula, but the IRS gives practical pointers: the prices buyers actually pay for used items at consignment and thrift shops are a good measure, and you can check classified ads and online listings to see what similar items sell for. Look for items of the same kind, age, brand, and condition, then use a price that reflects what they actually sold for rather than the optimistic asking price.

What moves the number

  • Condition. Like-new beats lightly used beats worn. Clothing and household items must be in good used condition or better to be deductible at all.
  • Brand and quality. A premium brand or solid construction can justify a higher value.
  • Age and demand. Some used items hold value; others have almost none.
  • Completeness. Missing parts or pieces lower the value.

A worked example

You bought a pair of jeans for $60 two years ago and they're in good condition. Similar jeans at nearby thrift shops are priced around $8. Your fair market value is about $8, and you'd note something like "compared with similar jeans at thrift shops" as your method.

Document how you got the value

The IRS expects you to keep a record of how you determined fair market value. For everyday items, a short note on your method is enough. For anything worth a few hundred dollars or more, save screenshots or notes of the comparable sales you relied on. See IRS donation receipt requirements for the rest of what to keep.

When you need an appraisal

A written qualified appraisal is generally required when you claim more than $5,000 for an item or group of similar items, and for a single clothing or household item claimed at more than $500 that isn't in good used condition. Valuable art and antiques are worth appraising well before those limits. Over $500, you also need Form 8283.

How DonationValue helps

DonationValue gives each item a low, median, and high estimate from its catalog and adjusts it for the condition you choose. The estimate is a starting point: if you have a receipt, an appraisal, or better local pricing, you can override it, and DonationValue keeps both numbers and the catalog version used. Read more about how valuations work.

This guide is educational and general in nature, not tax, legal, or financial advice. Tax rules change and depend on your situation, so check the IRS sources below or talk to a tax professional. Last reviewed October 6, 2026.