Fiscal Tax Blog

Deducting property donated to a charity on your 2008 Federal tax return is a good way to reduce your taxable income and also lower the tax amount due. It is necessary to do this on an itemized tax form. The place to claim this tax deduction on Form 1040, Schedule A is on lines 16 - 19 for the tax year of 2007.

Your charitable gift or donated property must meet particular criteria:
- A pledge or promise is not enough, you must actually have give cash or property.
- The charity must be a qualified tax-exempt organization. They need to have received a 501(c)(3) tax-exempt status from the IRS.
- You must itemize and be eligible to itemize deductions.
- You must have records, like canceled checks, receipts, and appraisals for donated property.

Record keeping requirements are in effect beginning with 2008. You must have written records of any cash donations over $250. For non cash contributions, you must have substantiation of any fair market value, and have receipts from the charity.

Non cash contributions of over $500 require attachment of IRS Form 8283. If it is a vehicle worth more than $500, you must have a written acknowledgement from the charity to claim a tax deduction. Items that are valued at over $5,000 need a written appraisal of fair market value from an independent appraiser and be in good working order.

There are limits on certain contributions, and general limits for itemized deductions. These limits fall at 50%, 30%, and 20%. 50% for cash up to your adjusted gross income (AGI), 30% for property, and 20% for appreciated capital gains. If you have contributions over these limits, the extra can be carried forward for up to five tax years.

For cash contributions under $250, retain proofs in the form of canceled check, or financial statements showing dates and amounts and names of the charities, any written receipts or acknowledgment letters, and any other documentations that prove your gift.

To receive the maximum benefit allowable under current rules, consult your tax professional and with the IRS regarding charitable contributions.
Deducting Mileage Incurred In Relation To Charitable Activities

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