The IRS allows you to deduct the fair market value of non-cash items that you donate to charity. However, if you’re interested in claiming itemized deductions for your non-cash contributions, there are some recording guidelines that you need to follow to ensure you have proper documentation if you are ever audited.
What You Should Record
For non-cash contributions to a charity, you need to keep thorough records in case you ever undergo an audit. These records should include descriptions of the items donated, the cost and fair market value of the items, as well as how you determined the fair market value. You should also make note of when and how you acquired the property that you donated.
Other Considerations for Donated Items
In addition to keeping a written record providing the details listed above, you should also get some documentation from the charities where you donated items. For property valued at less than $250, you will simply need to collect a receipt from the charity. If you donate items that are valued between $250 and $5,000, then you will need to collect a written acknowledgment from the charity you donated to. This should include:
- A description of the item
- Information about whether the charity provided you with goods or services in exchange for the donation
- A good-faith estimate of the value of any goods or services you received in exchange for these items
Need help with itemizing non-cash contributions to charity? Get with the tax help specialists at Taxation Solutions, Inc. today!