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 firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.