How to
Document
Charitable
Contributions
All slides are
taken from this
book.
Available from
Amazon.com
Full color version available at
www.createspace.com/4707238
If I hit the target
and actually
deduct the
right amount,
is
documentation
really a big
deal?
Donor gives $80,000
of non-publicly
traded stock ($3,700
basis) to charity. The
required qualified
appraisal is NOT
comple...
See Hewitt v. Commissioner, 109 T.C. 258 (1997)
Deduction reduced to
$3,700
Donor gives $80,000
of non-publicly
traded sto...
Donor gives
$435,000 of
equipment to public
charity, but appraisal
reports and receipts
omit required
information.
Later, ...
No deduction
+ 20% penalty
for underpayment
of taxes
See Friedman v. Commissioner, T.C. Memo 2010-45
Donor gives $435,000 ...
KNOW the rules
and
FOLLOW the rules!
Cash < $250
Property <$250
Property $250-$500
Property >$500
Property $5,000+
except publicly traded securities
Property >...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Note from charity before
taxes filed or due
(1) Amount(s), date(s) &
donor
Credit Card Statement
Charity 210.00
Two Hundre...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Note from charity before
taxes filed or due
(1) Amount(s), date(s) &
donor
(2) “No goods or services
were provided in
exch...
Charity 210.00
TwoHundredTenandNo/100
A. DonorGift
Charity 240.00
TwoHundredFortyandNo/100
A. DonorGift
Charity 230.00
Two...
Charity 260.00
TwoHundredSixtyandNo/100
A. DonorGift
I give through
payroll deduction
at work to a
united appeal, so,
there isn’t a
specific charity to
get a receipt from.
How...
If any single gift is
$250+, use a
pledge card
indicating no
goods or services
are given in
exchange, and the
W-2 or payst...
What about
documenting
gifts of
property?
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Notefromcharitybeforetaxes
filedordue
(1) Donoranddate,location&
descriptionofproperty
Donor’s reliable
recordsofgift,char...
So
then,
how
exactly
would
this
work?
For property gifts under $250, a receipt is
not required where it is impractical
Notefromcharitybeforetaxes
filedordue
(1) Donoranddate,location&
descriptionofproperty
Donor’s reliable
recordsofgift,char...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Notefromcharitybeforetaxes
filedordue
(1) Donoranddate,location&
descriptionofproperty
(2) “Nogoodsorserviceswere
provided...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Notefromcharitybeforetaxes
filedordue
(1) Date,location,and
descriptionofproperty
(2) “Nogoodsorserviceswere
providedinexc...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Notefromcharitybeforetaxes
filedordue
(1) Date,location,and
descriptionofproperty
(2) “Nogoodsorserviceswere
providedinexc...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Summary of
qualified
appraisal
attached to
tax return
Notefromcharitybeforetaxes
filedordue
(1) Date,location,and
descript...
Donor Records
Charity Statement
Charity Statement
Qualified
Appraisal
Cash < $250
Property <$250
Property $250-$500
Proper...
Qualified
Appraisal
(attach the
entire appraisal
report to the
tax return)
Notefromcharitybeforetaxes
filedordue
(1) Date,...
Notefromcharitybeforetaxes
filedordue
(1) Date,location,and
descriptionofproperty
(2) “Nogoodsorserviceswere
providedinexc...
Charities need not report
quid pro quo information
for gifts of $75 or less.
Donors need not
consider quid pro quo
benefit...
How to
Document
Charitable
Contributions
Help me
HERE
convince my bosses that continuing to build and
post these slide sets is not a waste of time. If
you work for...
If you clicked on
the link to let
me know you
reviewed these
slides…
Thank
You!
This slide set is from the curriculum for
the Graduate Certificate in Charitable
Financial Planning at Texas Tech
Universi...
Upcoming SlideShare
Loading in …5
×

Documenting Charitable Contributions

1,261 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,261
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
30
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Documenting Charitable Contributions

  1. 1. How to Document Charitable Contributions
  2. 2. All slides are taken from this book. Available from Amazon.com Full color version available at www.createspace.com/4707238
  3. 3. If I hit the target and actually deduct the right amount, is documentation really a big deal?
  4. 4. Donor gives $80,000 of non-publicly traded stock ($3,700 basis) to charity. The required qualified appraisal is NOT completed, but the valuation is correct. Result?
  5. 5. See Hewitt v. Commissioner, 109 T.C. 258 (1997) Deduction reduced to $3,700 Donor gives $80,000 of non-publicly traded stock ($3,700 basis) to charity. The required qualified appraisal is NOT completed, but the valuation is correct. Result?
  6. 6. Donor gives $435,000 of equipment to public charity, but appraisal reports and receipts omit required information. Later, to prepare for the audit, donor gets qualified appraisals. Result?
  7. 7. No deduction + 20% penalty for underpayment of taxes See Friedman v. Commissioner, T.C. Memo 2010-45 Donor gives $435,000 of equipment to public charity, but appraisal reports and receipts omit required information. Later, to prepare for the audit, donor gets qualified appraisals. Result?
  8. 8. KNOW the rules and FOLLOW the rules!
  9. 9. Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Cash $250+ As the opportunities for serious abuse increase, so do gift documentation requirements
  10. 10. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? How?…did you value it? Summary of Qualified Appraisal IRS Form 8283 Cash $250+ IRS Form 1098-C
  11. 11. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ or How?…did you value it?
  12. 12. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  13. 13. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  14. 14. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  15. 15. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  16. 16. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? How?…did you value it? Summary of Qualified Appraisal IRS Form 8283 Cash $250+ IRS Form 1098-C
  17. 17. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  18. 18. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  19. 19. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? How?…did you value it? Summary of Qualified Appraisal IRS Form 8283 Cash $250+ IRS Form 1098-C
  20. 20. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ or How?…did you value it?
  21. 21. Note from charity before taxes filed or due (1) Amount(s), date(s) & donor Credit Card Statement Charity 210.00 Two Hundred and No/100 A. DonorGift
  22. 22. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  23. 23. Note from charity before taxes filed or due (1) Amount(s), date(s) & donor (2) “No goods or services were provided in exchange for these gifts.” [or describe and value items provided]
  24. 24. Charity 210.00 TwoHundredTenandNo/100 A. DonorGift Charity 240.00 TwoHundredFortyandNo/100 A. DonorGift Charity 230.00 TwoHundredThirtyandNo/100 A. DonorGift
  25. 25. Charity 260.00 TwoHundredSixtyandNo/100 A. DonorGift
  26. 26. I give through payroll deduction at work to a united appeal, so, there isn’t a specific charity to get a receipt from. How do I substantiate?
  27. 27. If any single gift is $250+, use a pledge card indicating no goods or services are given in exchange, and the W-2 or paystub to substantiate
  28. 28. What about documenting gifts of property?
  29. 29. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  30. 30. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  31. 31. So then, how exactly would this work?
  32. 32. For property gifts under $250, a receipt is not required where it is impractical
  33. 33. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  34. 34. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  35. 35. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided]* *Part(2)notrequiredforgifts<$250 Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  36. 36. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal Cash $250+ How?…did you value it? IRS Form 8283
  37. 37. Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  38. 38. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? How?…did you value it? Summary of Qualified Appraisal IRS Form 8283 Cash $250+ IRS Form 1098-C
  39. 39. Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  40. 40. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  41. 41. Summary of qualified appraisal attached to tax return Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  42. 42. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?
  43. 43. Qualified Appraisal (attach the entire appraisal report to the tax return) Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  44. 44. Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)
  45. 45. Charities need not report quid pro quo information for gifts of $75 or less. Donors need not consider quid pro quo benefits •Item value does not exceed 2% of the donation or $101* •Item cost ≤$10.10* and gift $50.50* + *adjusted annually for inflation (2013) De minimus
  46. 46. How to Document Charitable Contributions
  47. 47. Help me HERE convince my bosses that continuing to build and post these slide sets is not a waste of time. If you work for a nonprofit or advise donors and you reviewed these slides, please let me know by clicking
  48. 48. If you clicked on the link to let me know you reviewed these slides… Thank You!
  49. 49. This slide set is from the curriculum for the Graduate Certificate in Charitable Financial Planning at Texas Tech University, home to the nation’s largest graduate program in personal financial planning. To find out more about the online Graduate Certificate in Charitable Financial Planning go to www.EncourageGenerosity.com To find out more about the M.S. or Ph.D. in personal financial planning at Texas Tech University, go to www.depts.ttu.edu/pfp/ Graduate Studies in Charitable Financial Planning at Texas Tech University

×