Substantiating Your Charitable Gifts

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When you claim a federal income tax deduction for charitable contributions, you must substantiate the contributions by maintaining certain records. The records must establish the charity to which the gift was made, the amount of cash or the type and value of other property donated to charity, whether anything was received in consideration for the contribution, and certain other requirements.

Cash contributions
In order to claim a charitable deduction for any contribution of cash, check or other monetary gift, you must maintain a record of such contributions through a bank record or a receipt from the charity showing the name of the charity, the date and amount of the contribution.

If you make charitable contributions through payroll deductions, you generally may substantiate the charitable deduction using the charity’s pledge card along with either a pay stub, a Form W-2, or some other employer-furnished document showing the amount withheld and paid to charity. If you make a single contribution of $250 or more by payroll deduction, the pledge card or a document from the charity must state that no goods or services were provided in return for the payroll deduction.

All contributions of $250 or more
If you claim a charitable deduction for any contribution of $250 or more, you must substantiate the contribution with a contemporaneous written acknowledgement of the contribution from the charity. The acknowledgement must contain the name of the charity, the amount of any cash contribution, and a reasonably detailed description of any non-cash contribution. The acknowledgement must also include:

  1. A statement that no goods or services were provided by the charity in return for the contribution
  2. A good-faith estimate of the value of such goods and services (these reduce the amount of the charitable deduction)
  3. A statement that the goods and services were token benefits or consisted entirely of insubstantial membership benefits or intangible religious benefits.

The acknowledgment is considered contemporaneous if you receive it by the earlier of the date on which you file your tax return for the year of the contribution or the due date (including extensions) for the return.

Noncash contributions
If you make noncash contributions, you must generally get a receipt from the charitable organization with:

  • Name of the charitable organization
  • Date and location of the contribution
  • Detailed description of the property

You must also keep a reliable written record showing the above three items as well as:

  • Fair market value of the property (and how it was determined)
  • Adjusted basis of the property
  • Amount claimed as a deduction
  • Terms of any conditions attached to contribution of the property

If the value of the contribution is $250 or more, you must also substantiate the contribution with a contemporaneous written acknowledgement of the contribution from the charity as described previously.

If the value is over $500, your records must also include how you got the property (purchase, gift, inheritance or exchange), when you got it and the cost or other basis of the property.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2016.

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