Substantiating charitable contributions
As you compile information on charitable contributions for your 2015 tax return, please take into account the following requirements.
- For a contribution of cash, check, or other monetary gift, regardless of amount, you must maintain a bank record or a written communication from the donee organization showing its name, plus the date and amount of the contribution. Any other type of written record, such as a log of contributions, is insufficient.
- If the contribution is worth $250 or more, you must substantiate the contribution with a written receipt from the donee organization. The receipt must set forth the amount of cash and a description (but not the value) of any property other than cash contributed. It must also state whether the donee provided any goods or services in return for the contribution, and if so, must give a good-faith estimate of the value of the goods or services.
- If you make separate contributions of less than $250, you won’t be subject to the written receipt requirement, even if your contributions to the same charity total $250 or more in a year.
- For a contribution of property other than money, you generally must maintain a receipt from the donee organization that shows the organization’s name, the date and location of the contribution, and a detailed description (but not the value) of the property. If circumstances make obtaining a receipt impractical, you must maintain a reliable written record of the contribution.
- In general, if the total charitable deduction you claim for non-cash property is more than $500, you must attach a completed Form 8283 (Noncash Charitable Contributions) to your return or the deduction is not allowed.
- For donated property with a value of more than $5,000, you are generally required to obtain a qualified appraisal and to attach an appraisal summary to the tax return. However, a qualified appraisal isn’t required for publicly-traded securities for which market quotations are readily available.
- For gifts of art valued at $20,000 or more, you must attach a complete copy of the signed appraisal (rather than an appraisal summary) to your return. IRS may also request that you provide a photograph.
- If you receive goods or services, such as a dinner or theater tickets, in return for your contribution, your deduction is limited to the excess of what you gave over the value of what you received.
- If you made a contribution of more than $75 for which you received goods or services, the charity must give you a written statement (either when it asks for the donation or when it receives it) that tells you the value of those goods or services.
Although you can’t deduct the value of services you perform for a charitable organization, some deductions are permitted for out-of-pocket costs you incur while performing the services. You should keep track of your expenses, including receipts, canceled checks, and other reliable written records.
Please contact a ShindelRock tax professional if you have any questions about these rules. Together, we can make sure that you’ll get all the deductions to which you’re entitled come next filing deadline.