Home / News & Updates

DOCUMENTING CHARITABLE DEDUCTIONS

If you donate:

Make sure to:

$249 or less

Keep a receipt, letter, bank record, or other written record from the recipient with recipient’s name, amount, and date of contribution.

$250-$500

Obtain a written acknowledgment from the recipient.

$501-$5,000

In addition to the written acknowledgment from the recipient, document the method of acquisition, date acquired, adjusted basis of property, fair value, valuation method, and condition of non-cash property contributed.

More than $5,000

Obtain an appraisal by a qualified appraiser.

$500,000 or greater

Obtain an appraisal by a qualified appraiser and attach a copy to your tax return along with acknowledgment from recipient.

·         Charity eligibility. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool, lists most organizations that are eligible to receive deductible contributions. In addition, churches, synagogues, temples, mosques and government agencies are eligible even if they are not listed in the tool's database.

·         Year-end gifts. Contributions are deductible in the year made. Thus, donations charged to a credit card before the end of 2015 count for 2015, even if the credit card bill isn't paid until 2016. Also, checks count for 2015 as long as they are mailed in 2015.

·         Itemized deductions. For individuals, only taxpayers who itemize their deductions on Schedule A can claim deductions for charitable contributions. A taxpayer will have a tax savings only if the total itemized deductions (mortgage interest, charitable contributions, and state and local taxes, among other figures) exceed the standard deduction.

·         Donation records. For all donations of property, including clothing and household items, get from the charity, if possible, a receipt that includes the name of the charity, the date of the contribution, and a reasonably detailed description of the donation. If a donation is left at a charity's unattended drop site, keep a written record of the donation that includes this information, as well as the fair market value of the property at the time of the donation and the method used to determine that value. Additional rules apply for a contribution of $250 or more.

·         Special rules. The deduction for a car, boat or airplane donated to charity is usually limited to the gross proceeds from its sale. This rule applies if the claimed value is more than $500. Form 1098-C or a similar statement must be provided to the donor by the organization and attached to the donor's tax return.

 

If the taxpayer's deduction for all non-cash contributions exceeds $500, a Form 8283 must be submitted with the return.