We have some expensive gifts (jewelry), one of which we donated. We got it appraised before the donation (~$2000). The charity sold it at an auction. I read the IRS rules so I know that that's an unrelated purpose and I'm supposed to donate what I paid for the item, not what it appraises for, but I didn't actually buy it. So what do I do? I absolutely, no question, want to do the legal and appropriate thing, but it also seems unfair if I can't deduct anything just because it was a gift. I can't imagine I'm the first person to ask this, but I couldn't find anything online. Does anyone know the law here?