Amount of Contribution Key to Record Needed

December 1, 2015

The record-keeping requirements for charitable contributions of property other than cash depend upon the amount of the charitable deduction claimed.

Here are the basic rules for various contribution amounts:

1. Less than $250 – The charity is not required to provide the taxpayer with any documentation. The taxpayer should request a written receipt from the charity after making the contribution.

2. Contributions of $250 or more – The charity is required to provide the taxpayer with a contemporaneous written acknowledgment. The taxpayer should keep this document with his tax records in case of an audit.

3. Deductions exceeding $500 – The charity is required to provide the taxpayer with a contemporaneous written acknowledgment. In addition, the taxpayer must complete Form 8283, Noncash Charitable Contributions, Section A.

4. Deductions exceeding $5,000 – The charity is required to provide the taxpayer with a contemporaneous written acknowledgment. The taxpayer must obtain a qualified appraisal and attach a copy of the appraisal summary to the tax return. In addition, the taxpayer must complete Form 8283, Noncash Charitable Contributions, Section B.

5. Deductions exceeding $500,000 – The charity is required to provide the taxpayer with a contemporaneous written acknowledgment. The taxpayer must obtain a qualified appraisal and attach a copy of the appraisal summary to the tax return. In addition, the taxpayer must complete Form 8283, Noncash Charitable Contributions, Section B. Additional substantiation rules may apply, which is the difference between the requirements for a donation exceeding $500,000 versus one exceeding $5,000.

As you can see, as the donation amount increases, the record-keeping requirements increase. Substantiating charitable contribution deductions with good record keeping and documentation helps to avoid potential problems with the IRS should you ever get audited.