Cash isn’t the only thing you can donate to charity and then deduct on your tax return. In many cases, you can donate goods such as household property to a qualified charitable organization and then deduct the value of those items on your return.
It’s important to keep track of the items you donate, in order to substantiate your deduction in the case of a tax audit. You need to document the following:
- What the item is (including its condition)
- Fair market value of the item (as well as how you determined the FMV)
- The name of the organization the item was donated to
- The date the item was donated
Additionally, for items valued at $250 or more, you will also need to obtain a letter from the charitable organization stating whether any goods or services were provided in return for the gift. If so, the written statement must include an estimate of the value of the goods and services provided, as you may only deduct the portion of the contribution valued above that amount.
Questions about documenting non-cash donations to charity? Just let the Taxation Solutions, Inc. team know. We can answer your questions, help you compile your documentation for an audit, and generally supply you with the knowledgeable tax help you need. Contact us now!