Tax Payer Restrictions on Non-Cash Contributions

Nebraska AARP Tax-Aide Policy

 

Noncash Charitable Contributions - - - IRS Form 8283

 

A noncash charitable contribution is a donation or gift to a qualified organization and may be deductible if the taxpayer uses Schedule A, Itemized Deductions.  There are limitations for noncash charitable contributions for AARP Tax Aide tax preparers.  Most often these contributions are for clothing and furniture that has an assessed “Fair Market Value” based upon “Thrift Store Prices”.  For each item, the tax payer must provide a listing of all donated items, date of donation, the qualified organization, and the assessed Fair Market Value, as well as an acknowledgment receipt from the charity for the donation.  For more details on the deductions see IRS Publication 17, Chapter 24, Contributions.

 

Caution to Taxpayers:

Be careful because the receipts from many thrift stores no longer show an assessed Fair Market Value for the items donated.  The AARP Tax Aide volunteers do not have the ability or qualification to determine Fair Market Value of donated items.  Most consumer computers and electronics have a small Fair Market Value compared to the original purchase price.  AARP Tax Aide counselors cannot prepare tax returns that:

·Have total noncash contributions exceeding $500. 

·Have donations of cars, boats, and airplanes.

 

Tax payer requirements for Noncash contributions less than $250

For any single contribution of less than $250, the taxpayer must keep:

• A receipt or other written communication from the organization or the taxpayer’s own reliable written records for each item, showing:

– Name and address of organization

– Date and location of the contribution

– Reasonably detailed description of the donated property

– Fair market value of the donated property

Tax payer requirements for Noncash contributions of at least $250 but not more than $500

For any single contribution of at least $250 and not more than $500, the taxpayer must have all the documentation described for noncash contributions less than $250. In addition, the organization’s written acknowledgment must state whether the taxpayer received any goods or services in return and a description and good faith estimate of any such items.

Tax payer requirements for Noncash contributions of more than $500

Out of Scope for Nebraska Tax-Aide volunteers:  For tax returns with more than $500 in total noncash contributions a Form 8283 must be prepared and filed.  Tax payers must show the required itemization and Fair Market Value for each donated item in order to fill out the form.

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f8283.pdf
(124k)
Wayne Culp,
Oct 24, 2013, 3:15 PM
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Wayne Culp,
Oct 24, 2013, 3:17 PM
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