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Reminders for Year-End Charitable Donations

On Behalf of | Dec 4, 2013 | Estate Planning, FTB, IRS |

In addition to achieving philanthropic goals, many people make charitable donations at the end of the year in order to maximize income tax benefits. To make sure your charitable donation accomplishes both charitable and tax-savings benefits, here are few considerations to keep in mind as you make your year-end donations:

1. Make sure the charity of your choice is a good recipient of your donation. You can learn about a charity’s activities, finances, and tax filings at www.guidestar.org. You should also talk to the charity to make sure it can manage your donation and use it for the purposes you intend.

2. Confirm that the donation you make will result in the desired tax benefit. The type of charity and nature of the donation may result in different tax benefits. See IRS Publication 526-Charitable Contributions (http://www.irs.gov/pub/irs-pdf/p526.pdf)

3. If you want to take your charitable deduction on your 2013 income tax return, make sure your donation is completed by December 31, 2013. This means the check must be cashed, the credit card must be billed and posted, and/or the property must be in the possession of the charity. See IRS Publication 526 for more guidance on the timing of your donation.

4. If you are donating property, determine whether you need a “qualified appraisal” to determine the value of your donation. This will apply to a non-cash donation where the deduction you want to claim is over $5,000. IRS Publication 561-Determining the Value of Donated Property (http://www.irs.gov/pub/irs-pdf/p561.pdf) provides guidance for the need for an appraisal.

5. Be sure to have the charity provide you with written acknowledgement of your donation if the value is over $250. The acknowledgement should include the amount of cash donated and/or a description of property donated (although the charity does not need to determine the value of the donated property). If goods and services were provided by the charity (such as dinner at a charitable event), then that must also be included on the acknowledgement. IRS Publication 1771-Charitable Contributions/Substantiation Disclosure (http://www.irs.gov/pub/irs-pdf/p1771.pdf ) provides details about the requirements for substantiating a donation. 


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