It is common practice for charities to hold auction events where attendees will bid upon and purchase items. The questions often arise whether (1) the money spent on the items purchased constitutes a charitable donation and (2) what kind of charitable deduction the individual who contributed the item is entitled to. 

The answer to the first question is some, but not all, of what’s paid for the item may be deductible. So, if you purchase items at a charity auction, you may claim a charitable contribution deduction for the excess of the purchase price paid for the item over its fair market value.  Fair market value being the amount the item would sell for on the open market when the parties to the sale are aware of all the facts, are acting in their own interest, are free of any pressure to buy or sell, and have ample time to make the decision.

You must be able to show, however, that you knew that the value of the item was less than the amount you paid for it. For...