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Uncover the Tax Basics for Charitable Contributions


Qualified organization

You can only legitimately deduct a charitable donation if the charity is a "qualified organization." Payments made directly to individuals are not deductible as charitable giving. To see if your organization qualifies, check out the IRS's Exempt Organizations Select Check tool.

Fair market value

Sometimes you make a charitable donation and receive tickets to a ballgame, a great tote bag or some other goods or services. You can deduct only the part of a donation that exceeds the fair market value of the stuff you get in return. For example, say you donated $200 and received tickets to the opera worth $75. You can deduct only $125 on your tax return.

Proof of donation

If asked, you must be able to prove to the IRS that you made the contribution. Proof can include a bank record, payroll deduction records or a thank-you letter from the organization (preferably on its letterhead) containing the date and amount of the contribution. If you text a donation, your telephone bill with the name of the group, date and amount will suffice as proof.

Large donations

If your deduction for a noncash contribution tops $500, you must fill out Form 8283, Noncash Charitable Contribution. If you make a noncash contribution of more than $5,000, you'll need an appraisal and must fill out Section B of Form 8283.

Whaling contributions

This shows how detailed, and obscure, IRS regulations in this area can be. If you're recognized as an official whaling captain by the Alaska Eskimo Whaling Commission, you may deduct any "reasonable and necessary" whaling expenses you pay to carry out sanctioned whaling activities, up to $10,000 a year.

What you can't deduct

  • Contributions to an individual.
  • The value of your time or services.
  • Appraisal fees.
  • Payments to a member of the clergy that they can spend as they wish.
  • Contributions to country clubs, civic leagues, chambers of commerce, labor unions, political organizations and candidates.

Again, the rules are complex, and may change quickly, so be sure to consult with a tax professional about any charitable deductions.


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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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