Nine IRS Tips for Deducting Charitable Contributions
Application to Church Contributions
1. Contributions must be made to qualified organizations (for example, churches) to be deductible. One cannot deduct contributions made to individuals, political organization and candidates.
2. One cannot deduct the value of his or her time or services even if provided to a church.
3. If your contributions entitle you to goods or services, you can deduct only the amount that exceeds the fair market value of the benefit received. For example, if you write a check for $25.00 to your church and receive a basketball tee shirt with the name of the church on it valued at $10.00 your deduction will be only $15.00 not the entire $25.00.
4. Donations of stock or property are usually valued at the fair market value of the property, but special rules apply to the donation of vehicles. Churches need to know the special rules and apply these in case of vehicle donations.
5. Clothing and household items donated must generally be in good condition to be deductible. The donor places the value on the donated items not the recipient.
6. Contributions of any amount by cash, check, or other monetary gift must be substantiated by a bank record orwritten communication from the organization (church) containing the name of the organization (church), the date of the contribution and the amount of the contribution.
7. In addition to the requirement in number 6 above, to claim a deduction for each contribution of cash or property equaling $250.00 (not cumulative contributions) or more one must obtain a written acknowledgement from the qualified organization (church) showing the amount of the cash and a description of any property contributed, and whether the organization (church) provided any goods or services in exchange for the gift. One document (for example, a giving record provided by a church) may satisfy both the written communication requirement for monetary gifts and the written acknowledgement requirements for all individual contributions of $250 or more.
8. If one claims a deduction of more than $500 for all property other than cash (see number 5 above) he or she must attach IRS Form 8283, Noncash Charitable Contributionsto their tax return.
9. Section B of Form 8283, which requires an appraisal by a qualified appraiser, must be completed for a donated item or a group of similar items valued at more than $5,000.
(Information adapted from IRS Tax Tip 2009-57 and an item in the October 2009 issue of Church Finance Today)
