In order to substantiate monetary charitable contributions, you must have either a bank record of the contributions or a written acknowledgement from the organization. Cancelled checks are the easiest way to substantiate your contributions. Unsubstantiated cash contributions without any written acknowledgement from the organization will not be allowed under an IRS audit.
If your monetary contribution is $250 or more, you must have both your cancelled check and a written acknowledgement from the organization. You do not have to have a written acknowledgement if your total contributions to any one organization are more than $250 as long as all individual contributions are less than this amount.
Unless otherwise specifically noted, no goods or services were received by the donor in exchange for the contributions referenced above other than intangible religious benefits.
Your written acknowledgement must state the amount of the contribution and must specifically state that no goods or services were received in exchange for the contribution. Charitable contributions to religious organizations should also acknowledge receipt of “intangible religious benefits” in return for the contribution. Suggested wording for an acknowledgement from a religious charitable organization is as follows: Unless otherwise specifically noted, no goods or services were received by the donor in exchange for the contributions referenced above other than intangible religious benefits.
In 2012, the Tax Court disallowed a deduction for charitable contributions to a church simply because the acknowledgement did not contain language similar to the above suggestion (David Durden, TC Memo 2012-140). Should you receive an acknowledgement without this required language, we recommend requesting an acknowledgement from the organization that meets all IRS requirements.
For charitable contributions of property that total more than $500, you must file Form 8283 to deduct the contribution. This form requires the name and address of the donee organization, a description of the items donated, date acquired, date donated, original cost (usually estimated), and fair value of the items donated.
Furthermore, you must attach to your return a copy of the written acknowledgement to claim a deduction for a donated vehicle valued at $500 or more. Qualified appraisals are required for donations of property other than publicly-traded securities with a value of more than $5,000. An appraisal summary must be attached to the return. Gifts of art valued at $20,000 or more require the full appraisal to be attached to the return.
If you do receive goods or services in exchange for your donation, then you can only deduct the amount of the contribution above the fair value of the goods or services received. There are exceptions for acknowledgement of de minimus items. If the value of goods and services received is $75 or more, then you must have an acknowledgement from the organization. The acknowledgement must state the value of the items received.
If you are considering donating a car with a value of $500 or more or any item with a value of $5,000 or more, please call us to assist you in properly documenting the donation.
