| Charitable Contributions / Substantiating charitable contributions by individuals |  |
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While all contributions must be
substantiated, contributions of $250 or more require a written receipt
from the charity. If you donate property valued at more than $500,
additional requirements apply. Contributions of less than $250.
For charitable contributions of less than $250 in cash, you must keep
one of the following: •
a cancelled check, credit card receipt, or electronic funds
transfer receipt; •
a letter from the charity acknowledging receipt of the
contribution and its date and amount; or •
another reliable written record showing the name of the charity
and the date and amount of the contribution. If the contribution was of property
rather than cash, you must keep a receipt from the charitable
organization showing: •
the contribution date; •
the charity's name; •
the location of the contribution; and •
a detailed description of the property (but not its value). A receipt isn't required if it's
impractical to get one, such as where property is left at the charity's
unattended drop site. In that case, for each item of donated property,
you must keep reliable written records that contain the above
information, plus the value of the property. Recordkeeping for contributions for
which you receive goods or services. 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. For example, if you gave $100 and in return
received a dinner worth $30, you can deduct $70. But your contribution
is fully deductible if: •
you received free, unordered items from the charity that cost no
more than $7.60 in total; •
you gave at least $38 and received only token items (bookmarks,
key chains, calendars, etc.) that bear the charity's name or logo and
cost no more than $7.60 in total; or •
the benefits that you received are worth no more than 2% of your
contribution and no more than $76.
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. Be
sure to keep these statements. Contributions of $250 or more.
For charitable contributions of $250 or more, a cancelled check isn't
enough. Instead, you need a written receipt from the charity that
includes: •
the amount of cash contributed and a description (but not the
value) of any property other than cash contributed; •
whether the donee organization provided any goods or services in
return for the contribution; and •
a description and good-faith estimate of the value of those goods
or services. If you received only
"intangible religious benefits," such as attending religious
services, in return for your contribution, the receipt must say so. This
type of benefit is considered to have no commercial value and so doesn't
reduce the charitable deduction available. If you make separate contributions
of less than $250, you won't be subject to the requirement to get a
written receipt, even if the sum of the contributions to the same
charity total $250 or more in a year. Also, if you have contributions
withheld from your wages, the deduction from each payment of wages is
treated as a separate contribution for purposes of the $250 threshold.
However, IRS is supposed to issue "anti-abuse" rules (which
haven't been published yet) aimed at preventing taxpayers from avoiding
the written receipt requirement by, for example, writing several checks
on one day to the same donee for a total of $250 or more. You must have the receipt in hand by
the time you file your return (or by the due date, if earlier) or you
won't be able to claim the deduction. Cash contribution made through
payroll deductions. A contribution that you make by withholding from your
wages may be substantiated by a pay stub, Form W-2, or other document
furnished by your employer that shows the amount withheld for the
purpose of a payment to a charity. You can substantiate a single
contribution of $250 or more with a pledge card or other document
prepared by the charity that includes a statement that it doesn't
provide goods or services in return for contributions made by payroll
deduction. The deduction from each wage payment
of wages is treated as a separate contribution for purposes of the $250
threshold. Substantiating contributions of
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, the services you performed and when you
performed them, and the organization for which you performed the
services. Keep receipts, canceled checks, and other reliable written
records relating to the services and expenses. As discussed above, a written
receipt is required for contributions of $250 or more. This presents a
problem for out-of-pocket expenses incurred in the course of providing
charitable services, since the charity doesn't know how much those
expenses were. However, you can satisfy the written receipt requirement
if you have adequate records to substantiate the amount of your
expenditures, and get a statement from the charity that contains a
description of the services you provided, the date the services were
provided, a statement of whether the organization provided any goods or
services in return, and a description and good-faith estimate of the
value of those goods or services. Contributions of property with a
value greater than $500. If you contribute property worth more than $500, you
must maintain written records that include: •
the information described above for contributions of property
over $250; •
how you acquired the property (purchase, gift, inheritance); •
the date you acquired the property; and •
the cost or other basis of property (other than publicly-traded
securities) held for less than 12 months before the donation, and, if
the information is available, of property held for 12 months or more
before the donation. Contributions of property with a
value greater than $5,000. If you contribute property of an item or group of
similar items exceeding $5,000, you must keep written records that
include: •
the information described above for contributions of property
over $500; •
a qualified appraisal made no more than 60 days before the
appraised property's contribution; •
an appraisal summary, which must also be attached to your tax
return; •
the cost basis of the property; and •
the date you acquired the property. A qualified appraisal isn't required for publicly-traded securities for which market quotations are readily available. A partially completed appraisal summary and the maintenance of certain records are required for (1) nonpublicly-traded stock for which the claimed deduction is greater than $5,000 and no more than $10,000, and (2) certain publicly-traded securities for which market quotations are not readily available. |
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