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Thanks, Bill. Now this question may be kind of crazy, but can you legally make a profit by donating? For example, I frequent auctions. Last week 8 pairs of used downhill skis and poles sold for $1 just to get rid of them. I see sewing machines in cabinets going for $1 all the time. Can I buy these things for the $1 price, and then donate them to Goodwill for the fair market value tax write off?

No, you can't. You are only allowed to deduct the lesser of your cost basis or the fair market value. If you buy something for $1 and it's worth more, your deduction is still limited to $1.

There is an exception for property that you've owned for more than one year. You can find everything you need to know in IRS Pub. 526, Charitable Contributions.

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