Charitable Contribution Substantiation Requirements

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Charitable Contribution Substantiation Requirements
March 1, 2001
Area(s) of Practice:
Tax Law

1. Qualified Appraisals. Taxpayers are generally allowed to deduct the fair market value of charitable contributions on the date of the contribution, even though the property may have a lower income tax basis. However, in the case of a non-cash contribution (other than publicly-traded securities) exceeding $5,000 ($10,000 for closely-held stock), you must obtain an appraisal for the contribution, and include Section B of Form 8283 (Appraisal Summary) with your income tax return. If you do not include a properly completed Form 8283 with your timely-filed income tax return, you will only be permitted to deduct your income tax basis in the contributed property.

2. Contribution of $250 or more. A charitable contribution of $250 or more must be substantiated by a contemporaneous written acknowledgment form given to the donor by the charity. This acknowledgment form must be in the hands of the donor before the earlier of the date the donor files his or her income tax return, or the due date (including extensions) for filing that return. If the acknowledgment form is not received within this time frame, the deduction will be lost. This rule applies to private foundations as well as public charities. Generally, the acknowledgment must include the amount of cash, a description of non-cash contributions, and a good faith estimate of the value of the goods or services (if any) received by the donor from the charity. We have a "sample acknowledgment form" which we can provide to you upon request.