Documentation and Substantiation Requirements for Charitable Contributions

Documentation and Substantiation Requirements for Charitable Contributions Cash giftsA deduction is allowed only if the taxpayer has a proper receipt (e.g., a canceled check or written statement from the charity) showing the name of the charitable organization and the date and amount of the contribution. A written statement from the charity is required if a payment is for more than $75 and is partly a contribution and partly for goods or services. The statement must provide an estimate of the value of the goods and services received by the donor. Noncash gifts (e.g.,household items)A receipt from the charity must be kept for any gift of property other than money. Clothes or other household items are deductible if they are in "good used condition or better" at the time of the gift. If an item is not in good used condition or better and its value exceeds $500, a deduction is allowed if a "qualified appraisal" is included with the return. Used cars, boats, orairplanesThe deduction is generally limited to the amount the charity receives on the sale of the car, boat, or airplane. The taxpayer should obtain a statement from the charity documenting the sales price. Form 1098-C (Contributions of Motor Vehicles, Boats, and Airplanes) must be attached to the return if the taxpayer claims a deduction in excess of $500. Cash or noncashgifts (including out-of-pocket expenses)of $250 or moreA contemporaneous written acknowledgment (CWA) from the charity (as well as certain payroll records in the case of gifts made by payroll deductions) is required to deduct a single cash or property contribution of $250 or more. A CWA also is required for a donation of $250 or more of out- of-pocket expenses a donor might incur in providing services to a charity. The CWA must include the amount of money and a description of any other property contributed, whether the charity provided any goods or services in return for the contribution, and a description and estimated value of the goods or services provided. Contemporaneous means that the donor must have the CWA by the earlier of (1) the date the tax return is filed for the year of the donation or (2) the due date (including extensions) for the tax return. Noncash gifts ofmore than $500Additional substantiation (e.g., how the property was acquired and its basis) is required on the tax return if donated noncash property is valued at more than $500. Qualified appraisals may be required if noncash contributions exceed $5,000 in value. Antiques, paintings,jewelry, and other"tangible personalproperty"The deduction is equal to the property's appreciated FMV only if the charity puts the property to "a use related to its tax-exempt purpose." Otherwise, the deduction is limited to the property's cost. The taxpayer should obtain a statement from the charity documenting the property's use.