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Charitable Contributions

Charitable contributions are only tax deductible if they are made to qualified organizations usually classified under the 510(c)(3) legal structure. When making any charitable contributions, the taxpayer or donor needs to be able to prove both the value of the charitable contributions and the condition of the items.

I donated a property, how much can I deduct as charitable contribution?

Properties donated to qualified organizations can be deducted at the fair market value (FMV) at the time of the charitable contribution. The fair market value of a property can be obtained by looking up resale values in second hand shops, newspapers, garage sales, and so on.

I donated clothes, what charitable contributions can I deduct?

Clothes that are donated to qualified charities can only be tax deductible if they are in good or better condition. However, the IRS is not specific of the definition of 'good' condition.

Charitable contributions of over $500

If a single item donated is not in good condition but is worth more than $500, the taxpayer can only deduct this item if the taxpayer gets a qualified appraisal of the item.

How to report noncash charitable contributions?

Noncash charitable contributions total to more than $500, then they must be reported on the IRS tax form 8283 called Noncash Charitable Contributions.

Charitable contributions that benefit taxpayers

If the taxpayer makes a charitable contribution to a qualified charity but then receives something in return such as a meal, then the amount of tax deduction is reduced by the value of the benefits received. Usually the charity will give the donor information about how much the benefit is worth so the donor can then calculate the tax deduction amount.

Can I deduct cash contribution? How?

The only way a taxpayer can deduct cash contribution is if the taxpayer can produce certain records such as:

  • a bank record
  • cancelled check
  • bank copy of cancelled check
  • bank statement with name of charity,
  • date,
  • amount, and
  • written communication from the charity.

The written communication must include the:

  • name of charity
  • date of contribution
  • amount of contribution