When you make a non-cash charitable contribution (such as land, equipment, stock, vehicles, etc.), the substantiation requirements by the IRS are more stringent than for cash contributions. The most important thing for you to note is that the burden of proof for the value of the non-cash gift lies with the donor, not with the charitable organization. It is the donor's responsibility to provide accurate records substantiating the deduction on his/her tax return. You must keep the following records, based on the value you place on the item donated.
Non-Cash Gift of Less than $500
- The charity's receipt or non-cash gift letter
- Name and address of the organization to which the contribution was made.
- The date and location of the contribution.
- A description of the property donated.
- The fair market value of the property and how you figured the fair market value.
- The amount you claim as a deduction for the tax year in which it was given.
Non-Cash Gifts of $500 to $5,000
- All of the above.
- A description of how the donor acquired the property (purchase, gift, inheritance).
- The approximate date the donor acquired the property.
- The cost or other basis of the property
- Donor must complete IRS Form 8283 and attach it to his/her 1040.
Non-Cash Gifts Above $5,000 (Publicly Traded Stocks are not subject to these Requirements)
- All of the above
- Obtain a qualified appraisal, no earlier than 60 days prior to the contribution
- Prepare a qualified appraisal summary
- Form 8283 must be signed by both the appraiser and a representative of the charitable organization
When giving a non-cash contribution, make sure the property is marketable. Do not give something just to get rid of it - make sure it will benefit the charity to which it will be given. Most charities retain the right to refuse any non-cash gift.
Denise Craig, Chief Financial Officer
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