Who Wants To Make A Non-cash Contribution?

By Author: DANNY BREEDLOVE
Total Articles: 11
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Do you have unwanted goods and personal items but not sure what to do with them? Why not donate them to a qualified non-profitable charitable organization asdescribed in section 501(c)(3) of the Internal Revenue Code? The funds raise could do a lot of good for the community; shelter, food, job services, you name it!
If you decide to make non-cash contribution, do so with caution, the IRS quick to disqualify your non-cash charitable contributions if you do not have adequate records to support your donation. Here are five quick tips to ensure this does not happen to you.

1.Get a receipt. Whenever you donate items of value please get a receipt from the charitable organization. It should include the name of the organization, the date of the gift, a general description of the item, and that you received nothing in return for your gift.

2.Break out the items donated. Create a detailed list that includes when you acquired the donated item, the estimated value of the item when acquired, and how it was acquired.

3.Take a picture of the donation. When itemizing the items to be donated, don’t forget to take ...
... a quick photo of the item. Title the photo and place the photo title on the list of items to be donated for cross-reference.

4.Create a reasonable value of the donation. Use thrift shop values and online resale values for similar items from sites like e-bay to support your claim of value. Do not forget to provide a statement of condition. Your donated items should be in good or better condition.

5.Know when special rules apply. If you donate an item of high value, you may need to obtain an appraisal. Donated vehicles and boats valued over $500 may require an approved Form 1098-C statement from the charity when they sell the vehicle. If they use the vehicle, you will want a print out of value from an approved vendor like Kelly Blue Book or NADA. If the value is over $5,000, you will want to get an independent appraisal of donated items. Donated stocks and mutual funds will need a statement of value from your investment company and from the charity receiving the goods.*
*Special caution: When donating appreciated stocks and mutual funds owned by you for over one year, do not sell the asset. Conduct a direct transfer of the certificates and have the charity sell the investment. This will maximize the value of your donation and avoid potential capital gain taxes.

The content of this article is for general informational purposes and does not constitute legal advice or a legal opinion. For answers to specific questions concerning your situation, you should consult a knowledgeable attorney or tax professional who can advise you regarding your particular circumstances.