Small Business Taxes & Management


Charitable Contributions


Small Business Taxes & ManagementTM--Copyright 2018, A/N Group, Inc.


There are a number of points to consider with respect to charitable contributions, but recordkeeping and documentation is often the key focus in an IRS audit. Special rules apply to different types of property and for some property contributions an appraisal is required, an appraisal summary and/or other documentation may have to be attached to the return. IRS Publication 526 and the instructions to Form 8283 provide significant guidance. Publication 1771 provides information on substantiation and disclosure requirements.

Deductible for Charitable Contribution
___ Churches synagogues, temples, mosques, and other religious organizations
___ Federal, state and local governments if gift for public purposes (e.g., museum donation)
___ Nonprofit schools and hospitals
___ Salvation Army, American Red Cross, Goodwill Industries, United Way etc.
___ War veterans' groups
___ Check Exempt Status of charity
___ Out-of-pocket expenses including
     ___ Uniforms not suitable for everyday wear
     ___ Car expenses including gas and oil, but not general repairs, depreciation, etc. or
     ___ Car expenses at 14 cents per mile
     ___ Unreimbursed out-of-pocket for travel, lodging, meals, as chosen representative at charitable convention

Nondeductible Contributions
___ Contribution to a specific individual
___ The part of a contribution from which you receive, or expect to receive, a benefit
___ Value of your services
___ Personal expenses
___ Qualified charitable contribution from an IRA
___ Appraisal fees (you can claim them as a miscellaneous itemized deduction)
___ Certain contributions of partial interests in property
___ Contributions to fraternal societies for purpose of paying medical or burial expenses of members
___ Expenses you paid for another person who provided services to a qualified organization
___ Contributions from lobbying where you may benefit
___ Contributions to a retirement home for room, board, maintenance, or admittance
___ Costs of raffles, bingo, lottery, etc. (e.g., church raffle)
___ Dues to fraternal orders and similar organizations
___ Tuition or amounts you pay instead of tuition, even if paid for your children to attend parochial school
___ Contributions connected with split-dollar insurance arrangements
___ Blood donations
___ Value of income lost while you work as an unpaid volunteer
___ Quid pro quo contributions, i.e., where you receive a benefit equal to the contribution (you donate two acres of property to secure a variance to build)
___ Partial interest in property (exceptions apply)

Contributions of Property
___ Amount of contribution is fair market value at time of contribution
___ Contributions subject to special rules:
     ___ Clothing or household items
     ___ Cars, boats, planes, or motor vehicle designed for highway use
     ___ Taxidermy property
     ___ Property subject to a debt
     ___ Partial interest in property
     ___ Fractional interest in tangible personal property
     ___ Qualified conservation contribution
     ___ Future interest in tangible personal property
     ___ Inventory from a business
     ___ Patent or other intellectual property


___ Cash contributions of less than $250--bank record, canceled check, credit card statement, or receipt from charity
___ Payroll deductions-keep pay stub, Form W-2 or other document from employer
___ Cash contributions of $250 or more--written acknowledgment from charity before return is filed.
___ Each payment is a separate contribution (e.g., 8 checks for $50 to Red Cross; less than $250 rule applies, no receipt from charity needed
___ Property contributions, see below

Qualified Charitable Distributions (QCD) from IRA

___ Distribution directly from IRA (other than SEP or SIMPLE) to charity excludable from income
___ No deduction for contribution
___ Maximum annual exclusion $100,000 per individual
___ QCD limited to amount that would be included in income
___ Must be at least age 70-1/2

Recordkeeping and Filing--Special Requirements

___ Property contributions over $500 Form 8283 and instructions
___ Securities
     ___Company name
     ___Number of shares
     ___Kind of security
     ___Whether share of mutual fund
     ___Whether regularly traded
___ Nonpublicly traded securities more than $10,000--appraisal requirement
___ Art valued at $20,000 or more copy of appraisal attached
___ Restricted use property
___ Over $5,000 of similar items; separate Form 8283 for each donee
___ Qualified appraiser requirements; exceptions
___ Donated item information
     ___Date of contribution
     ___Date acquired by donor (various if at least 12 months)
     ___How acquired by donor (e.g., purchase, gift, etc.)
     ___Donor's cost or adjusted basis
     ___Fair market value (FMV)
     ___Method used to determine FMV (e.g., thrift shop, catalog, etc.)
___ Statement for qualified conservation easements of $5,000 or less
___ Clothing or household items not in good used condition-appraisal required
___ Vehicle-VIN; year; make; model; condition; mileage
___ Form 1098-C for vehicles
___ More detail on higher value items-e.g., $900 generator-make, model, wattage

Copyright 2018 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 05/21/18