By: Laurie Valentine- COO & Trust Counsel
To assure your charitable gifts are deductible, following these eight tips from the IRS:
1) Give to a qualified organization. IRS Publication 526, Charitable Contributions, tells you what constitutes a “qualified organization”. Contributions earmarked for a specific individual or to a political organization or candidate are not deductible.
2) Itemize your deductions on Schedule A of IRS Form 1040.
3) You may only deduct the amount by which your contribution exceeds the market value of any benefit you receive for making the gift such as merchandise, ball game tickets or other goods and services.
4) Stock and other non-cash property contributions are generally valued at fair market value. Fair market value is the price at which property would change hands between a willing buyer and willing seller, neither having to buy or sell and both having reasonable knowledge of all relevant facts.
5) Clothing and household items must be in good or better condition. Special rules apply to vehicle donations.
6) You must maintain a bank record, payroll deduction records or written communication from the organization containing its name, date of your gift and the amount for all contributions of cash, check or other monetary gifts.
7) If your contribution of cash or property is $250 or more, the organization’s gift acknowledgement must also state whether it provided any goods or services in exchange for your gift and the value of what you received. If your contribution is over $500 complete and attach IRS Form 8283, Noncash Charitable Contributions, to your return.
8) If the property you are giving is valued at more than $5,000 you must get a qualified appraisal and complete Section B of IRS Form 8283.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.