Reporting Requirements for Deductible Donations

Individuals, partnerships, and corporations must include Form 8283 when filing tax returns if the deduction for all non-cash charitable contributions exceeds $500. This form reports information about non-cash charitable contributions.

IRC Section 1.170A-13 outlines the recordkeeping and return requirements for taxpayers claiming deductions for charitable contributions. Here’s a concise summary:

Cash Contributions

 

• A bank record (e.g., a canceled check, bank statement, or credit card statement) or a written communication from the charity (e.g., a receipt or letter) showing the name of the charity, the date of the contribution, and the amount of the contribution.
• For contributions of $250 or more, a contemporaneous written acknowledgment from the charity is required, detailing the amount of cash and a description of any property other than cash contributed, and whether the charity provided any goods or services in exchange.

Non-Cash Contributions

 

• A receipt from the charity showing the name of the charity, the date and location of the contribution, and a description of the property. If obtaining a receipt is impractical, a reliable written record is acceptable. The FMV of real estate is typically determined by considering comparable sales, the property’s condition, location, and any other factors that might affect its value. The value of publicly traded stocks and bonds is usually determined by the mean between the highest and lowest quoted selling prices on the date of the contribution.
• For contributions exceeding $500, additional information must be included on Form 8283, Noncash Charitable Contributions. For contributions over $5,000, a qualified appraisal is generally required.

Contributions of Vehicles, Boats, and Airplanes

 

• A contemporaneous written acknowledgment from the charity, including the donor’s name and taxpayer identification number, the vehicle identification number, the date of the contribution, and a statement indicating whether the charity provided any goods or services in exchange.
• If the claimed value exceeds $500, Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, must be attached to the tax return. The FMV is generally the price listed in a used vehicle pricing guide for a private party sale, adjusted for the vehicle’s condition, mileage, and other relevant factors.

Contributions of Clothing and Household Items

 

• A receipt from the charity or a reliable written record if obtaining a receipt is impractical.
• Items must be in good used condition or better. For items valued over $500, a qualified appraisal may be required.

Contributions of Appreciated Property

 

• Detailed records including the fair market value of the property at the time of the contribution and the method used to determine that value. Specific rules apply for publicly traded securities versus non-publicly traded securities.
• For contributions over $5,000, a qualified appraisal is required, and Form 8283 must be completed and attached to the tax return.

Documentation must be obtained by the time the tax return is filed or the due date (including extensions) for filing the return. All records must be accurate and complete to substantiate the deduction. For donations >= $250, be sure to obtain receipts from your charity that your donation is deductible, especially if donating non-cash such as furniture or mutual funds ( source). For donations < $250, keep records either from the charity or of your financial transaction. Store these with your income tax papers.

IRS Pub. 561 provides guidelines on determining the value of donated property for tax purposes. This publication is essential for taxpayers who donate property and need to establish its FMV to claim a deduction on their tax returns.

For donations of property valued over $5,000, a qualified appraisal is generally required. The publication details what constitutes a qualified appraisal and who qualifies as a qualified appraiser.

Failure to comply with these requirements may result in the disallowance of the charitable contribution deduction and potential penalties. Taxpayers who significantly overvalue donated property may be subject to penalties.