CHARITABLE CONTRIBUTIONS: IRS PUBLICATION #526, #561, #78
"QUALIFIED DOMESTIC CHARITABLE ORGANIZATION" REQUIREMENT:
Internal Revenue Code Section #170 allows the deduction of contributions made to "Qualified Domestic Charitable Organizations" by individuals and corporations.
The IRS publishes a list of organizations (IRS Publication #78) that have applied for and received tax-exempt status as "Qualified Domestic Charitable Organizations".
Thus, the contribution must be made to a "Qualified Domestic Charitable Organization".
To the extent a tangible benefit is derived from a charitable contribution, the value of such benefit cannot be deducted-the reciept from the organization will provide this information if applicable.
The following items are NOT deductible as charitable contributions:
1-The value or donation of one's time or services (however, unreimbursed expenses related to the services rendered may be deducted) such as uniforms, local transportation costs, lodging, and meals while away from home.
2-Gifts to needy individuals or any individual
3-Dues, fees, or bills paid to coutry clubs, fraternal orders, lodges, or similar groups
4-Value of blood given to a blood bank
5-Cost of tuition
6-Cost of bingo, lottery, or raffle tickets
9-Your personal expenses
10-Contributions to a non-qualified organization
11-The portion of a contribution from which you benefit
Charitable contributions are deductible on Schedule A, Form 1040 as an itemized deduction. Thus, the taxpayer must itemized deductions instead of using the standard deduction. You can deduct them only in the year you actually make the contribution in cash or non-cash property.
Donations mailed are deemed made on the date of mailing.
Credit card donations are deemed made on the date charged to the credit card.
Pay by phone donations are deemed made as of the date shown on the statement by the institution.
RECORDKEEPING AND VALUATION REQUIREMENTS:
ALL charitable contributions (cash and non-cash) MUST be fully documented and substantiated by proper records such as:
2-Credit Card statements
3-Properly filled in reciept, letter, or written communication from the charitable organization
4-Qualified Written Appraisal
Non-Cash charitable contributions are generally deducted at the item's Fair Market Value at the date of contribution. The IRS has a publication #561 which provides guidelines as the to proper valuation for various items.
LIMITATIONS ON CHARITABLE CONTRIBUTION DEDUCTIONS:
The general limitation on the deduction for charitable contributions is 60%, 30%, or 20% of the taxpayer's adjusted gross income. The percentage depends on the type of property contributed and the type of charity to which the contribution is made.
Excess charitable contributions may be carried forward and deducted during the 5 year carryover period.
For certain types of contributions, a qualified written appraisal is required to be submitted with the tax return. Autos, art work, boats, and similar items are generally under this requirement.
Charitable contributions are a high audit target. Accurate and complete records are required and will be necessary should the IRS question any deduction.
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