Tax Tip of the Week – Noncash Donations Substantiation

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Value-noncash-donations-800X800 From QuickFinder 1040 for 2010

General record keeping requirements for noncash contributions:

1) Name of charitable organization.

2) Date and location of contribution.

3) Reasonably detailed description of contributed property.

4) Fair market value and method of valuing the property.

5) Cost or other basis of the property if FMV must be reduced. 

Specific requirements:

  • Less Than $250. A receipt is not required where it is impractical to get one. For example, when property is left at a charity's unattended drop-site.
  • $250 to $500. Written acknowledgment from the charitable organization is required . The acknowledgment must contain the name and address of the organization, date and location of the contribution, and a description of the property. It must also state whether any goods or services were provided to the donor in return for the contributions and the FMV of such goods or services.
  • $501 to $5,000. Same records required as the $250 to $500 category. In addition, the taxpayer's records must show how the property was acquired, the date acquired and the adjusted basis of the property. If the taxpayer is unable to provide the basis of the property or the date of acquisition, an explanation should be attached to the tax return.
  • More Than $5,000. Same requirements as the $501 to $5,000 category. Most contributions over $5,000 require a written appraisal. See IRS Publication 561 , Determining Value of Donated Property, for more information about contributions over $5,000. 

P.S. We always suggest that you take pictures of the items you donated as extra proof of the donations.

Like any good CPA, I need to add a disclaimer: unfortunately, it is impossible to offer comprehensive tax info over the internet, no matter how well researched or written. And remember, I love my readers but having me bookmarked on your computer doesn’t make you a client: before relying on any information given on this site, contact a tax professional to discuss your particular situation.