IRS Double Standard – How Much Is Hair Worth?

So I was doing a little organizing recently and went through my pile of “tax papers” to see if they were all worth keeping. Amongst them was my donation acknowledgement card from Locks of Love. If you’re not familiar with it, Locks of Love is a 501c3 charity that makes real hair wigs for kids that have lost their hair due to medical issues and cannot afford a real hair wig.

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My Locks of Love Donation Acknowledgement Card

Earlier this year, I donated a 14″ pony-tail of my own hair to Locks of Love, and after talking with the stylist who cut it off, I got curious and poked around the internet to see what my hair’s “cash value” was if I were to sell it on the open market. On sites like buyandsellhair.com, the going rate for a ponytail like the one I sent off seemed to go up to $1,000 or more. Mine was on the higher end, but if you check it out, you can see that the value of hair varies a lot based on things like:

  • what color is it?
  • straight or curly?
  • thick or thin? texture?
  • how long is the ponytail to be sold?
  • has the hair ever been dyed?
  • is the hair still on your head?
  • has your hair ever been blow dried? curling irons? straighteners?
  • are you a vegetarian?
  • do you eat natural foods or have health issues?

The best hair is called “virgin” as in never been touched by anything unnatural (hair dye, heat, etc.). To be perfectly honest – it was a strange corner of the internet that I found myself in.

It was too late for me to sell my hair (I had already stuck it in the mail to Locks of Love), but I made a mental note that apparently hair has a cash value and stuck the donation card in the “taxes” pile when it came in the mail. Heck, I didn’t want to miss out on the opportunity to deduct a $1,000 in-kind donation on our returns!

 

Do We Get A $1,000 Deduction?

So when I came across the donation card while organizing, I thought I should at least check with our accountant if it is deductible. Mostly I was concerned because the donation acknowledgement didn’t have a cash value on it (like a goodwill donation receipt), so I didn’t know if I would need to retain additional proof of the hair’s value to get the deduction.

Imagine how sad I was when I got our accountant’s email back.

“You don’t have to keep the acknowledgement card since a donation of hair wouldn’t be deductible anyway. At best the cost of the haircut and the driven mileage would be deductible.”

Turns out, the IRS says you can’t deduct the donation of any body part as an in-kind charitable donation. Which, okay… I guess I can see if they’re trying to maintain that selling organs is illegal and trying to draw distinctions there… but wait. This just seems wrong. You know why? Because if I sold my hair, the IRS would have expected me to pay income taxes on it.

That’s right.

When you donate hair, the IRS says it’s worth $0 so you can’t deduct it. When you sell hair, the IRS says it’s worth whatever you were paid and you better pay income taxes on it!

Talk about your double standards. What’s it worth IRS? $0 or $1000?

It’s Not Just Hair – It’s All Body Parts

Think about egg donation.

In scenario 1, you’ve got a young woman who “donates” her eggs to a couple looking to conceive, and let’s suppose she gets paid $10K. (Back when I was in college, the advertised rates in the student paper started around $10K and climbed from there.) In all likelihood, she’s going to be handed a 1099 MISC form at the end of the “donation” process, and the IRS will know to expect her to pay taxes on that income.

In scenario 2, a couple using IVF finally conceives a family, but still has unused non-fertilized eggs at the cryo-bank. Not embryos, folks! Those eggs cost thousands of dollars to harvest and store – although in this case, the couple was happy to pay since now they have their family. But if they want to donate those unused eggs to a non-profit research lab, are they able to get any sort of tax write off? No. No tax deductions for them!

Why does the IRS get to have it both ways?

 

Let’s End The Double Standard

I know the US tax code is not really known for its simplicity but the huge double standard here just seems glaringly obvious. I’m not a legislator, so maybe I’m missing a huge helping of other issues, but for the sake of consistency, why not let body parts donated to certified non-profit organizations be deductible if they are over a certain value?

Who wants to start a petition at change.org?

 

If the double standard remains, I’m going to have a tough decision in another 12-18 months when my hair is ready to be cut again. How is the most value extracted for my hair? By donating it directly to Locks of Love? Or would it be better to sell it on the open market and donate all (or some?) of the money to the charity but keeping a tax deduction for us?

 

Have you ever bought/sold/donated a body part?  (Real hair extensions count, ladies!  As do eggs, sperm, blood, plasma…)  What do you think about the IRS’s double standard on body parts? Are there any other IRS double standards that you have beef with?

27 comments to IRS Double Standard – How Much Is Hair Worth?

  • I donated hair to locks of love many years ago!!! I had never thought of it that way though so that is definitely something to consider. I’ll sign the petition!
    Holly@ClubThrifty recently posted..Craigslist: Great Way to Sell your Crap or Total Pain in the Ass?My Profile

  • That charity is amazing, what a great idea! I wish I could have done something with my hair the last time I cut, I had a lot. I donate blood often (in France you can’t be paid to do it). I would like to donate my eggs too, I am pretty sensible to that subject, but they ask that you have had kids of your own first, and since you can’t be paid, the compensation is really ridiculous for the time and pain incurred, so I think I would do it once only.
    The IRS thing makes no sense, you’re right.
    Pauline recently posted..Caring for your eyes on holiday: 5 tips from a proMy Profile

    • You can’t get paid for egg donation? I don’t know if anyone would donate eggs to someone they didn’t know in the states if they didn’t offer compensation. I looked into it when I was in college, and it’s a big time investment, not to mention pumping your body full of all the extra hormones can have a big impact on your life, too!

  • Interesting, though I can’t say it really surprises me. You would think it would be nice for the IRS to allow for deductions for these things, especially if done for charity. I sold plasma a few times in college, but was only done to make a few bucks.
    John S @ Frugal Rules recently posted..A Smart Way to Play Interior Designer When MovingMy Profile

  • I’ve looked into this before, too! But quickly abandoned the idea of selling because if I want to look presentable I need to use heat on my hair every once in a while. (Even though I know it’s damaging.)

    I’ve never thought of deducting my Locks of Love donations….or the fact that it truly IS such a horrible double standard! Hair’s one thing…but geez…if you give someone your egg…..

    Let me know if that petition gets started!
    femmefrugality recently posted..Quality vs. Price: St. Brigid’s Necklace ReviewMy Profile

  • For one, I’m jealous that your hair grows that long. Mine seems to stop just past shoulder length. I had no idea hair could be worth anything until a friend had the same dilemma a few years back. She had waist length “virgin” hair and was torn whether to donate or sell it. I think I’d sell it, then make a donation. That rule is really poor, but there are so many IRS rules that don’ make sense. I did sell plasma once in college for some extra money. It felt really wrong. I have donated blood several times, but not recently. I had to have a blood transfusion after my daughter was born. Also funny that donated blood costs $800 per unit because I got the bill for $1600 for the two units I needed. I guess they could charge what they want. It’s not like your going to argue cost when you’re needing a transfusion!
    Kim@Eyesonthdollar recently posted..How To Have a Cheap European HolidayMy Profile

    • I think a big part of it is how lazy I am about my hair. I don’t even own a blow dryer or hot curlers or anything like that, so my hair never touches heat and I get very little breakage. When I was growing it out, I noticed I didn’t start to see any split ends until it had been about 18 months without a trim.

      How did selling plasma feel wrong? Just curious…

      Blood costs $800 per unit in the hospital? Holy cow! I know it costs something to test it and make sure it’s safe, but wow… I had no idea there was that kind of markup on something that more often than not is donated!

  • They should give you a deduction for the hair. Come to think of it, blood donations should be tax deductible too. If anything it would probably increase the amount of blood donated, people will do just about anything to save on their taxes.
    justin@thefrugalpath recently posted..5 Posts to Help you Over the Hump: Election EditionMy Profile

    • Blood donations are so important that it makes me wish I were able to participate, but sadly I’m not able to donate blood. I’ll just have to keep growing my hair out to donate that instead!

  • CF

    I have never donated hair! I’m rather vain about my hair actually ;)

    I never thought about that double standard until now. Taxes are a convoluted mess and this is just another example.

    As an aside, I do wish it was easier to sell eggs… three eggs (they were wasted anyways!!) could have paid for my degree.
    CF recently posted..Recipe Idea: Fresh tomato salsa (Pico de Gallo)My Profile

    • Just because you cut your hair to donate doesn’t mean vanity has to go out the window! I got compliments on my hair long and short, FWIW. =)

      As for eggs, I totally agree that I wish it were easier, but if it were, I doubt the pay would be nearly so high for them!

  • Man, what a mess. I had no idea about any of this. Makes me want to make my daughters grow their hair long and sell it though, haha! I think the tax code should be simpler overall, I think all this stuff is so freaking confusing!
    TB at BlueCollarWorkman.com recently posted..Tips From a Former Car Thief on How to Protect Your CarMy Profile

  • [...] over at Mo’ Money Mo’ Houses liked our post IRS Double Standard – How Much Is Hair Worth? enough to include it in her new Weekly Link Love – Seinfeld [...]

  • It’s up to you of course, but you could estimate what your deductibles usually are to see if it’s even worth it to try for a deduction. If you sell the hair and donate the money to charity, would your deduction be very much? Also will your other deductions amount to enough to make a difference?

    Bottom line: you are generous to donate your hair!
    Maggie@SquarePennies recently posted..10 Tips to Make a Career Wardrobe Work for You and Your BudgetMy Profile

    • =) Thanks Maggie! Optimizing the value of the donation is going to depend mostly on our tax situation the year it gets long enough to donate (probably 2013 or late 2014). We’re borderline in itemizing our deductions – but if we plan well and “double up” property taxes in a single calendar year, then itemizing makes more sense and the deduction would be worth about $300 or so in taxes. It’s a long ways off… my hair is just again past my shoulders so needs to grow quite a bit more before it’s even a consideration!

  • M D Weiss

    Like many others who posted, I was surprised my hair donation is not tax deductible. My never ending struggle with the IRS for fairness continues.

    During one dispute with the IRS, it classified my income in a category that made it taxable, but then denied it was in that category for a tax credit. When I asked the IRS agent how they could do something that wasn’t fair or ethical, he said, “Because the courts said we can”.

    In this case, my hair does not meet the criteria for selling it so, donating it to this cause seems worthwhile to me.

    Just FYI, here’s what Locks of Love says about it in their FAQ section:
    Q. Is my hair donation tax-deductible?
    A. Please check with your tax preparer. We cannot place a monetary value on a ponytail.

  • [...] our Pennies points out the lack of consistency in the US Tax [...]

  • [...] got a kick out of the irony in the US tax code regarding donations of hair that I pointed out in How Much Is Hair Worth? and she kindly shared it with her readers in her post Link Time [...]

  • [...] do you know about hair donation? Or forgetting that, maybe you just want to sell your hair. Do you know how much you can get? More [...]

  • [...] at Blue Collar Workman liked our post that asked How Much Is Hair Worth? and included it in his Blue Collar Roundup.  Thanks, TB!  Hope your daughters are okay with your [...]

  • The important thing to remember is that CLOTHES ARE tax deductible.

    Therefore, if you pin the hair to a hat, and send it in as a hat and not a body part, then you have created something different.

    Remember also that the target application is not HUMAN body part TO Human body part. The recipient is going to wear the hair as a WIG which is like a hat !!

    The hair to locks of love is NOT NOT going to be implanted like a liver, a kidney, or hair implantation procedure.

    Therefore, but cutting your hair it is no longer a living organ NOR a body part. It is trash unless you make it into a wearable clothing device.

    Therefore, buck the trend and make your hair donation into a wearable piece of clothing. Then let locks of love unpackage it and take it apart.

    This was instantiate maybe what CPA’s call “basis” – you could sell the pony tail hat or headband to someone up to $1000 but you could also give it away.

    Next example – donation of mummies or archealogical body parts to museums or universities. When someone has a mummy and donates it to a trust or a museum do they get deductions ? Obviously the parts are not being used human-2-human and they are decorations if anything.

    • I’ll let you try pinning it to a hat and claiming it as a deduction. Somehow I don’t think the IRS is going to let that fly, but if you can get a donation receipt that says “thanks for donating a hat” then go for it. I think the rules are pretty lame, but don’t think I’m going to risk an audit for it. =)

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