Time Running Out on Donation Opportunities

As the clock ticks down, you had better get on the ball if you still want to make a charitable contribution or two, qualifying for a deduction on your 2013 income tax return.  And if you do, don’t forget:

  • If you’re an IRA owner aged 70-1/2 or more, Uncle Sam still permits you to transfer tax-free up to $100,000 per year to an eligible charitable organization.  And because such a distribution is not includible in your gross income, it will not affect the calculation of various limitations on certain deductions and exemptions.  Be careful with your selection of donees – donor-advised funds and “supporting organizations” are not eligible recipients.
  • If, like most folks, you’re donating clothing and household items, remember that such items need to be in good used condition or better in order to qualify for deduction.
  • Monetary donations typically are the most common form of gifts, but remember that regardless of amount, a taxpayer must have a bank record or a written communication from the charity showing the name of the charity and the date and amount of the contribution.  And beyond that, you must obtain a (contemporaneous) acknowledgement from a charity for each deductible donation of $250 or more.
  • Contributions are deductible in the year “made”, including a little wrinkle in this area which permits donations charged on a credit card in 2013 to be deductible in 2013 even though the credit card bill is not paid until the new year.
  • For all donations of property, including clothing and household items, you should obtain from the charity a receipt that includes the name of the charity, date of contribution, and a reasonably detailed description of the donated property.
  • Donations of cars, boats or airplanes to a charity are generally limited to the gross proceeds from sale of the assets.  And get a Form 1098-C or similar statement from the charity, which you should also attach to your return when it is filed.

Happy New Year to all!

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He may be reached at 831-7288, welcomes comments at jquinn@ashleyquinncpas.com, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.

 

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