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Category: Deductions and Credits

Charitable Contributions

Did you make a cash contribution to your favorite charity? Have you recently spent a weekend cleaning stuff out of your garage or basement that you then donated to a local charity?


Charitable contributions can be tax deductible, but you must have the proper records to support your deduction.To be deductible, charitable contributions must be made to qualified organizations. Payments to individuals are never deductible. When you make a monetary contribution (regardless of the amount) you must maintain information for your records. Keep a bank statement, written communication from the qualified organization containing the name of the organization, the date of the contribution, and the amount of the contribution.


In addition to deducting your cash contributions you can generally deduct the fair market value of any other property you donate to these organizations. For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a simultaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document may satisfy both the written communication requirement for monetary gifts and the simultaneous written acknowledgment requirement for all contributions of $250 or more.


Under the previous rules, records such as personal bank registers, diaries or notes made around the time of the donation could often be used as evidence of cash donations. Personal records like this are no longer sufficient.


If your deduction for a noncash contribution is more than $500 Form 8283 should be included with your return. If you claim a deduction for a contribution of noncash property worth more than $5,000, you will need a qualified appraisal of the noncash property and must fill out Form 8283, Section B. If you claim a deduction for a contribution of noncash property worth more than $500,000, you also will need to attach the qualified appraisal to your return.



Determining the Value of Donated Property (latest rev. 2007)

Instructions for Form 8283