When making year-end gifts to charity keep these items in mind.
REQUIREMENTS TO BE TAX DEDUCTIBLE:
MUST BE A QUALIFIED CHARITY
501 ©3 organization: Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations
Not deductible: Political organization or candidate, Dues to any organization, donation to an individual
YOU MUST HAVE PROPER SUBSTANTIATION/DOCUMENTATION FOR THE DEDUCTION
CONTRIBUTIONS UNDER $250 (money)
1. Must have a bank record-check OR
2. A receipt/written document from the charity showing name of the organization, date, and amount of contribution.
CONTRIBUTIONS UNDER $250-(property)
1. Must have receipt with name of organization, date & location of contribution, and description of property (FMV of property need not be stated on the receipt)
2. If you deposit clothes, etc. in a drop box/site, you must maintain reliable written records with respect to the donated property to substantiate the contribution.
CONTRIBUTIONS OF MONEY OR PROPERTY OF $250 OR MORE
Cash donations must have cancelled check or receipt.
Property donations must have receipt that includes name of donee, date & location of contribution & description of property in detail reasonably sufficient under the circumstances.
All donations must have a contemporaneous written acknowledgement from organization including:
1. Amount of cash or description of property
2. Statement of whether or not the organization provided any goods or services in consideration for the donation given
3. If goods or services were provided, then a description and good faith estimate of the value of those items
The acknowledgement is contemporaneous if it is received by the taxpayer before he files his tax return.
CONTRIBUTIONS OF PROPERTY $501-$5000
Same as above PLUS taxpayer must maintain written records that include how he acquired property, date, and original cost or other basis. This information is included on Form 8283 included in the tax return.
CONTRIBUTIONS OF PROPERTY OVER $5000
Need qualified appraisal, also attach a fully completed appraisal summary to the tax return; and maintain all information required for the written records. Also the taxpayer must have a contemporaneous written acknowledgement from the donee organization.
Exception: The deduction taken cannot be more than what the organization sold the item for i.e. ring, or car even if the appraisal was more