How to Properly Substantiate Your Charitable Donations

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‘Tis the season for … tax preparation. No, it’s certainly not as fun or exciting as the holiday season. One of the first tax-preparation steps is to confirm you have all records of your charitable donations. Any donations you make to qualified Section 501(c)3 charitable organizations may be deductible on your federal income tax return.

If you plan to deduct charitable donations you made last year on your 2016 tax return — or if you’re planning your charitable giving strategies for this year — you should be aware of the IRS’s rules for substantiating these donations. Failure to properly substantiate donations could result in a lost tax deduction, penalties, and interest.

Substantiating Cash Donations

The substantiation requirements for donations of cash vary depending on how much cash you give:

  • Less than $250 — You can substantiate this donation with a cancelled check, receipt from the charity or some other written record. Receipts or written records should show the name of the charity, amount of the contribution and date the contribution was made. Note, separate contributions of less than $250 to a single charity are not combined when determining if the $250 threshold is exceeded.
  • $250 or more — You must substantiate this donation with a contemporaneous written acknowledgement from the charity. This should indicate the amount of the contribution and the value of goods and/or services you received (if any) in exchange for the donation. To meet the “contemporaneous” requirement, the taxpayer must have proper documentation of the qualified charitable donation. Obtaining documentation from a charity after the tax return is filed (i.e. during an audit) will negate the tax deduction.

Substantiating Noncash Donations

The substantiation requirements for donations of noncash assets also vary depending on the value of the assets donated:

  • Assets worth less than $250 — You can substantiate this donation with a receipt indicating the name of the charity, description of the asset, and date and location of the donation. You will also need to document how the value of the donated assets was determined.
  • Assets worth $250 or more — You must substantiate this donation with a contemporaneous written acknowledgement indicating the name of the charity, description of the asset, and date and location of the donation.
  • Assets worth more than $500 — In addition to the requirements listed above, you also must maintain records documenting the date and manner in which you acquired the asset (i.e. purchase, gift, inheritance), and your adjusted basis in the property. Note, there are additional rules for substantiating donations of vehicles. If your aggregate noncash gifts to all charities for the year exceed $500, you also must file IRS Form 8283 (Noncash Charitable Contributions).
  • Assets worth more than $5,000 — You must include a qualified appraisal of the asset that’s signed by both the appraiser and the charity along with Form 8283, and include the appraisal with your income tax return. However, you do not need an appraisal for publicly traded securities worth more than $5,000. The appraisal must be performed no earlier than 60 days before the asset is donated to the charity.

Follow the Rules

Be sure you understand and follow these IRS donation substantiation rules as you prepare your 2016 tax return in the coming weeks. And be sure to consult your tax advisor if you have more detailed questions about the rules.


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