Grossbach Zaino & Associates, CPA's, PC

Document Carefully When Making Donations

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Individual taxpayers may deduct their charitable gifts as an itemized deduction for income-tax purposes. However, the IRS has very specific requirements when it comes to documenting contributions.

 

The Basics

 

You cannot deduct any contribution of cash, check, or other monetary gift unless you maintain, as a record of the contribution, a bank record or a written communication from the charity showing its name, plus the date and the amount of the contribution. For noncash donations, you need a receipt and a record showing the charity’s name and a description of the gift.

 

If the value of any gift equals $250 or more, you also need a contemporaneous written acknowledgement from the charity stating the amount of any donation made by cash (or check); a description of any property other than cash; and a statement of whether the charity provided any goods or services in exchange for the gift and, if so, a description and a good faith estimate of the value.

 

Noncash Contributions Greater Than $500

 

The general rules for noncash contributions are the following:

 

  • For contributions of $500 to $5,000, the donor must attach a description of the donated property to the tax return

 

  • For contributions of $5,000 to $500,000, the donor must attach a “qualified appraisal” to the tax return, along with additional information about the property and the appraisal

 

  • For contributions of more than $500,000, the donor must attach a qualified appraisal to the return

 

Additional rules apply for contributions of motor vehicles, boats, and airplanes if the donation’s claimed value exceeds $500.

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