Documentation for Charitable Contributions

Published on Thursday, December 15, 2011

Yesterday I asked my daughter to name three things she learned during the day. She began with a statement about what makes plants appear green (from biology class) and followed that with some obscure fact from math class. It was her third statement, however, that caught my interest: “Always get the receipt!” As it turns out, she had fueled her car after school using her debit card and she forgot to request the gas receipt to print out. She knew this would make reconciling her bank account more difficult for her later, and she doesn’t get her allowance until she has shown her mom that her bank account is reconciled.

Another area that it is important to save receipts for is charitable contributions. The IRS requires “contemporaneous receipts” for contributions, regardless of the dollar amount. To deduct a contribution of cash, check, or other monetary gift, you must maintain a bank record, payroll deduction records or a written communication from the organization containing the name of the organization, the date of the contribution and amount of the contribution. For text message donations, a telephone bill will meet the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution, and the amount given.

Non-cash contributions must be in good condition and are valued at the price at which the property would change hands between a willing seller and a willing buyer.

If the amount donated, whether cash of property, is in excess of $250, you must have written acknowledgement from the qualified organization showing the amount of cash or description of the property contributed, and whether the organization provided any goods or services in exchange for the gift.

For non-cash contributions in excess of $5,000, other than publicly traded securities, the donor must obtain an appraisal prepared by a qualified appraiser. The appraisal must be prepared no earlier than 60 days before the date of the contribution and no later than the due date of the tax return. In addition, the appraiser must sign the Form 8283, Noncash Charitable Contributions.

For a donation of a vehicle in excess of $500 a donor must obtain a form 1099-C from the organization that the vehicle was donated to.

If you have any questions on any of the rules pertaining to charitable contributions, please do not hesitate to call our office.

Tyler Nyman, CPA