The Law Office of Marian C. Blakeslee
Call For a Free Consultation 415.729.9297

Tax Newsletter

  • Deductions for Business Meals and Entertainment: The 50% Rule
    In most cases, you can deduct no more than 50% of certain unreimbursed business-related meals and entertainment expenses on your income tax return. This limit applies to employees or their employers, and to the... Read more.
  • Reliance Upon an Expert as Cause for Tax Fraud
    When a taxpayer fails to file a tax return or to pay a tax that is due, the IRS will impose a penalty. However, a taxpayer will be excused from paying the penalty for failure to file or pay if he or she shows that there was reasonable... Read more.
  • Making Charitable Bequests with Non-U.S. Assets
    Taxpayers who make contributions to qualified charitable organizations are entitled to a tax benefit in the form of a charitable deduction on their income taxes. However, the issue becomes more complex when a non-U.S. citizen makes a... Read more.
  • Business Gifts: What is Deductible?
    If you give business gifts either directly or indirectly to clients or potential clients, you may be able to deduct some or all of the cost of the gifts. Business gifts that may typically be characterized as entertainment... Read more.
Tax News Links

Keeping Accurate Records Of Charitable Contributions

A tax deductible item may be subtracted from a taxpayer’s income, thereby reducing taxable income before calculating the amount of tax owed. The resulting tax savings vary, depending on the taxpayer’s income tax bracket. A long-established type of deduction is for contributions to charitable organizations.

There are many rules and regulations surrounding the deductibility and amounts of bequests to charities. This article focuses on record-keeping requirements to ensure that the charitable deduction is allowed by the Internal Revenue Service (IRS). Tax laws establish deductions, but the IRS also publishes rules and regulations to explain and regulate the deductions. The IRS regulations establishing the record-keeping obligations are discussed in this article.

Cash Contributions
For each cash contribution (by cash, check, or credit card) of less than $250, the taxpayer must maintain at least one of the following:

  • A canceled check or account statement showing how the contribution was made;
  • A receipt (or letter) from the charity showing the date and amount of the contribution; or
  • Other reliable written records showing the charity’s name and the date and amount of the contribution.

For cash contributions of $250 or more, a written acknowledgement from the charity is required that contains the following information:

  • The amount received;
  • Whether the taxpayer received any goods or services in exchange for the contribution, other than token items and membership benefits; and
  • A description and good faith estimate of the value of the goods and/or services received.

Non-Cash Contributions – Less Than $250 Value

A contribution of property valued at less than $250 requires a receipt from the charity showing:

  • The name the charitable organization;
  • The date and location of the contribution; and
  • A reasonably detailed description of the property contributed, perhaps including fair market value (FMV), although this is not necessarily required.

Additional records are required that include the following information:

  • Name and address of the charity.
  • The date and location of the contribution.
  • A detailed description of the property donated.
  • FMV of the property when it was contributed and how this was calculated.
  • The cost or “basis” (i.e., the original cost, subject to additions and deductions) of the property if the FMV was reduced by depreciation.
  • The amount claimed as a deduction for the tax year as a result of the contribution.
  • Any terms or conditions attached to the contribution, such as on the use or sale of the item contributed.

Non-Cash Contributions – $250 to $500 Value

The same information and records required for non-cash contributions of less than $250 are required for contributions of $250-500. In addition, the acknowledgment must:

  • Include a description of the property (not necessarily the value); whether the taxpayer received any goods or services from the charity as a result; and a description and good faith estimate of the value of the goods and services received, unless the contribution consists of intangible benefits.
  • Be obtained before the date the tax return is filed or the due date of the filing (including extensions).

Non-Cash Contributions – $500 to $5,000 Value

For property contributions in this value range, the information and records required for non-cash contributions of a lesser amount are required. Additional records must be kept that include the following information:

  • How the property was obtained, e.g., by purchase, bequest, inheritance, or exchange.
  • The approximate date the property was obtained or created (substantially completed) by or for the taxpayer.
  • The cost or adjusted basis of property held for less than a year. If the property has been held more than a year, this information should be reflected, if such documentation is available. This requirement does not apply to publicly-traded securities (stocks, bonds, etc.).

Non-Cash Contributions – Over $5,000 Value

If a deduction over $5,000 is claimed for contribution of one property or a group of similar property items, the taxpayer is required to obtain and maintain the acknowledgment described above for non-cash contributions of a lesser amount and must maintain the same documents. In addition, the taxpayer must generally also obtain a written appraisal from a qualified appraiser. The IRS has provided numerous regulations governing the information that must be contained in a qualified appraisal.

Share This Page:
The Law Offices of Marian C. Blakeslee
The Law Offices of Marian C. Blakeslee is located in Sausalito, CA and serves clients in and around Sausalito, Mill Valley, Corte Madera, Larkspur, Belvedere Tiburon, Greenbrae, San Quentin, Stinson Beach, San Rafael, San Anselmo, Fairfax San Francisco, Ross, Novato, Woodacre, San Geronimo, Nicasio, Forest Knolls, South San Francisco, Alameda County, Contra Costa County, Marin County and throughout northern and southern California.
© 2013 - 2019 The Law Offices of Marian C. Blakeslee. All rights reserved.
Custom WebExpress™ attorney website design by
Quick Contact Form - Tab
Captcha Image