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On IRS published IR-2011-18

By Children’s Home Society of Florida Foundation

On December 14, 2011, the IRS published IR-2011-18 and suggested a number of tax tips for end-of-year charitable giving. These included several specific recommendations.

1. IRA Rollover – For individuals age 70½ and older who are IRA owners, they may have their IRA custodian make a direct transfer to qualified charities of up to $100,000. These direct transfers may fulfill part or all of the required minimum distribution for this year.

2. Clothing and Household Goods – Deductions for gifts of clothing and household goods are permitted if they are in “good used condition or better.” A gift item that has a value over $500 may be of a different quality, provided that there is an appraisal.

3. Gifts of Money – All gifts of money must be documented through a bank record or receipt. The gift should show the date, amount of the gift and the name of the charitable organization. Bank records may include a cancelled check, a bank statement or a credit card statement. Gifts may also be made through payroll deductions. In this case, the taxpayer should retain a pay stub, Form W-2 or a pledge card that shows the amount, the date of the gift and the name of the charity. If the gift is $250 or more, a contemporaneous written acknowledgement from the charity is required. This receipt must be in the taxpayer’s possession on the date of filing his or her tax return.

4. Timing – A contribution is deductible in the year when it is given. Credit card contributions may be made through December 31st, 2011. Similarly, checks that are sent through U.S. mail by December 31 are deductible if they clear in the normal course.

5. Charities – Deductions are only permitted for gifts to qualified charities. IRS Publication 78 is available on http://www.irs.gov and lists the qualified charitable organizations.

6. Itemized Deductions – Individuals who wish to claim their charitable gifts will need to itemize deductions on Schedule A of Form 1040. Normally, a taxpayer will itemize only if his or her charitable gifts, state and local taxes, mortgage interest and other deductions are larger than the standard deduction.

7. Clothing and Household Item Receipts – The taxpayer should obtain a receipt from the charity. It must list the name of the charity, the date of the gift and a reasonably-detailed description of the gift items.

8. Boat, RV or Car – The gift is usually limited to the gross proceeds from sale if the vehicle is valued at over $500. The charity will send IRS Form 1098-C to the taxpayer and this should be attached to Form 1040.

Conclusion

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Filed under: Ethics, Retirement and Benefits, Taxation | Tagged: By Children's Home Society of Florida Foundation, charitable giving, charity, End of Year Giving Tips, Gifts of Money, IRA Rollover, IRS, IRS Form 1098-C, Itemized Deductions, Schedule A of Form 1040, Tax giving charity, W-2 | 4 Comments »