Questions often arise about how to properly document charitable contributions. Here’s a brief overview.
Single Contributions of Less than $250
Taxpayers can substantiate with bank records or written confirmation from the charitable organization.
Single Contributions of $250 or More
Requires written acknowledgment from the charitable organization showing the amount of the donation.
Note the use of the words “single contribution.” Here’s an example of what this means:
Joe gives $100 per month to his favorite charity. Because each individual donation is less than $250, he can substantiate his entire charitable contribution — $1,200 — with bank records.
What About Cash Donations at Church?
What if you throw some money into the collection plate at church? If the amount of the contribution is less than $250, and you are putting a check into the plate, you’d be okay because you’d have a record of the payment. But if you’re throwing in cash, you’d be out of luck unless you could get the church to give you a receipt.
Less than $250
If the value of the property is less than $250, you can substantiate with a receipt showing the name and address of the charity, and a description of the property donated. Ideally you’ll get a receipt from the organization, but if that’s not possible, then your own written records are sufficient.
Between $250 and $499
Must have a written acknowledgment from the organization, as well as a description of the donated property.
Between $500 and $5,000
Must have a written acknowledgment from the organization, as well as a description of the donated property. On Form 8283 (more on that later), you must report the date you acquired the property, how you acquired it (such as by purchasing it) and your basis in the property.
Between $5,001 and $500,000
In addition to the requirement for written acknowledgment, you must also obtain a qualified appraisal, and attach the appraisal summary to the tax return. (EXCEPTION: if your donation was of publicly traded securities, you don’t need to get an appraisal.)
More than $500,000
All of the above applies, and you must attach the full qualified appraisal to the tax return.
Special Rules for Stock Donations
If the stock is publicly traded, no appraisal is needed.
Special Rules for Vehicle Donations
If more than $500: you must receive written acknowledgment from the organization; if the organization sells the car, your donation is limited to the amount the organization received in the sale, regardless of what the vehicle is worth.
If the total of all of your property contributions is more than $500, you must file Form 8283 with your tax return and give a description of all the property you donated. I’ll go into more detail about Form 8283 in a future post.