Documenting Charitable Contributions

1. How to Document Charitable Contributions

2. All slides are taken from this book. Available from Amazon.com Full color version available at www.createspace.com/4707238

3. If I hit the target and actually deduct the right amount, is documentation really a big deal?

4. Donor gives $80,000 of non-publicly traded stock ($3,700 basis) to charity. The required qualified appraisal is NOT completed, but the valuation is correct. Result?

5. See Hewitt v. Commissioner, 109 T.C. 258 (1997) Deduction reduced to $3,700 Donor gives $80,000 of non-publicly traded stock ($3,700 basis) to charity. The required qualified appraisal is NOT completed, but the valuation is correct. Result?

6. Donor gives $435,000 of equipment to public charity, but appraisal reports and receipts omit required information. Later, to prepare for the audit, donor gets qualified appraisals. Result?

7. No deduction + 20% penalty for underpayment of taxes See Friedman v. Commissioner, T.C. Memo 2010-45 Donor gives $435,000 of equipment to public charity, but appraisal reports and receipts omit required information. Later, to prepare for the audit, donor gets qualified appraisals. Result?

8. KNOW the rules and FOLLOW the rules!

9. Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Cash $250+ As the opportunities for serious abuse increase, so do gift documentation requirements

10. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? How?…did you value it? Summary of Qualified Appraisal IRS Form 8283 Cash $250+ IRS Form 1098-C

11. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ or How?…did you value it?

12. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ How?…did you value it?

20. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal IRS Form Cash $250+ or How?…did you value it?

21. Note from charity before taxes filed or due (1) Amount(s), date(s) & donor Credit Card Statement Charity 210.00 Two Hundred and No/100 A. DonorGift

23. Note from charity before taxes filed or due (1) Amount(s), date(s) & donor (2) “No goods or services were provided in exchange for these gifts.” [or describe and value items provided]

24. Charity 210.00 TwoHundredTenandNo/100 A. DonorGift Charity 240.00 TwoHundredFortyandNo/100 A. DonorGift Charity 230.00 TwoHundredThirtyandNo/100 A. DonorGift

25. Charity 260.00 TwoHundredSixtyandNo/100 A. DonorGift

26. I give through payroll deduction at work to a united appeal, so, there isn’t a specific charity to get a receipt from. How do I substantiate?

27. If any single gift is $250+, use a pledge card indicating no goods or services are given in exchange, and the W-2 or paystub to substantiate

28. What about documenting gifts of property?

30. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

31. So then, how exactly would this work?

32. For property gifts under $250, a receipt is not required where it is impractical

33. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

35. Notefromcharitybeforetaxes filedordue (1) Donoranddate,location& descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided]* *Part(2)notrequiredforgifts<$250 Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

36. Donor Records Charity Statement Charity Statement Qualified Appraisal Cash < $250 Property <$250 Property $250-$500 Property >$500 Property $5,000+ except publicly traded securities Property >$500,000 Artwork >$20,000 except publicly traded securities Donor Records Why?…did you give? quid pro quo? Who? What? When? Where? Summary of Qualified Appraisal Cash $250+ How?…did you value it? IRS Form 8283

37. Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

41. Summary of qualified appraisal attached to tax return Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

43. Qualified Appraisal (attach the entire appraisal report to the tax return) Notefromcharitybeforetaxes filedordue (1) Date,location,and descriptionofproperty (2) “Nogoodsorserviceswere providedinexchangefor thesegifts.”[ordescribe andvalueitemsprovided] Donor’s reliable recordsofgift,charity, date,place,FMV(and costbasisifrelevant)

45. Charities need not report quid pro quo information for gifts of $75 or less. Donors need not consider quid pro quo benefits •Item value does not exceed 2% of the donation or $101* •Item cost ≤$10.10* and gift $50.50* + *adjusted annually for inflation (2013) De minimus

46. How to Document Charitable Contributions

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49. This slide set is from the curriculum for the Graduate Certificate in Charitable Financial Planning at Texas Tech University, home to the nation’s largest graduate program in personal financial planning. To find out more about the online Graduate Certificate in Charitable Financial Planning go to www.EncourageGenerosity.com To find out more about the M.S. or Ph.D. in personal financial planning at Texas Tech University, go to www.depts.ttu.edu/pfp/ Graduate Studies in Charitable Financial Planning at Texas Tech University

Documenting Charitable Contributions

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