Donate Cars Charity

Donate Cars Charity Biography

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Receipts issued by the charity are required to be in your possession before filing your tax return in order to allow you to take a tax deduction. 

For monetary donations under $250 a canceled check, payable to the charity, may serve as a receipt. 

Cash (currency) donations without a receipt are not deductible. 

Clothing and household items left for "Goodwill" without retaining a receipt, are not deductible. 

Donations by C-corporations are severely limited,  therefore most charitable giving should be done by individuals, via form 1040 as an itemized deduction on Schedule A (donations through partnerships, S-corporations, LLC's may pass through to form 1040, Schedule A). 

Brief summary for non-cash donations (such as clothing or household items given to Goodwill, for example)

Non-cash donations must be in "good used condition or better" and must be documented with a receipt showing the charity name, date, description and value. 

If the total of non-cash donations for the year is under $500.01, then just the charity name(s) and value is shown on the tax return. 

If the total of non-cash donations for the year is over $500 and under $5,000.01 then more information must be listed: full address of the charity and a description on how the current value was determined (independent appraisal, looking at comparable sales, using the thrift shop value or...) 

If the total of non-cash donations for the year is over $500 and under $5,000.01 and any individual charity receipt is over $500 then additionally for that receipt, more information must be listed: age of the donated property, original cost and how the items were originally acquired. 

Over $5,000 per item or group of related items requires an appraiser to sign your tax return and the charity also needs to sign the tax return, as well as other requirements. Please contact your CPA to discuss before making such a large donation to make sure all requirements needed to be done ahead of time are understood. 

Note: For more restrictive rules regarding a tax deduction from the donation of your motor vehicle, see additional information further below. 

What donations are tax deductible?

To get a charitable tax deduction, your donations generally need to be made to a non-profit §501(c)(3) charitable organization.

Donations to most churches and religious organizations give you a charitable deduction.

Every non-profit organization (also called NPO or not-for-profit) is not necessarily a §501(c)(3) charity.  For example, donations to not-for-profit sports associations or not-for-profit professional associations are usually not tax-deductible.

Conversely, all §501(c)(3) charities are not necessarily considered "non-profit."  For example, google.org is a for-profit charitable organization.

Most not-for-profit lobbying groups and political campaigns do not qualify you for a charitable deduction on your donations.

When donations are tax deductible?

Starting with 2007 A donor must receive any required acknowledgment from the charity by the earlier of: the date on which the donor actually files his or her individual federal income tax return for the year of the contribution; or the due date (including extensions) of the return.  Meaning, for example, that waiting until an IRS audit to then ask the charity for a receipt, technically, permanently disallows the tax deduction, by definition.

If you make a donation to a charity this year, you may be able to take a deduction for it on your 2011 tax return. Here are the top nine things the IRS wants every taxpayer to know before deducting charitable donations.

Make sure the organization qualifies Charitable contributions must be made to qualified organizations to be deductible. You can ask any organization whether it is a qualified organization or check IRS Publication 78, Cumulative List of Organizations. It is available at www.IRS.gov.

You must itemize Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.

What you can deduct You generally can deduct your cash contributions and the fair market value of most property you donate to a qualified organization. Special rules apply to several types of donated property, including clothing or household items, cars and boats.

When you receive something in return If your contribution entitles you to receive merchandise, goods, or services in return – such as admission to a charity banquet or sporting event – you can deduct only the amount that exceeds the fair market value of the benefit received.

Recordkeeping Keep good records of any contribution you make, regardless of the amount. For any cash contribution, you must maintain a record of the contribution, such as a cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity containing the date and amount of the contribution and the name of the organization.

Pledges and payments Only contributions actually made during the tax year are deductible. For example, if you pledged $500 in September but paid the charity only $200 by Dec. 31, you can only deduct $200.

Donations made near the end of the year Include credit card charges and payments by check in the year you give them to the charity, even though you may not pay the credit card bill or have your bank account debited until the next year.

Large donations For any contribution of $250 or more, you need more than a bank record. You must have a written acknowledgment from the organization. It must include the amount of cash and say whether the organization provided any goods or services in exchange for the gift. If you donated property, the acknowledgment must include a description of the items and a good faith estimate of its value. For items valued at $500 or more you must complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return. If you claim a deduction for a contribution of noncash property worth more than $5,000, you generally must obtain an appraisal and complete Section B of Form 8283 with your return.

Tax Exemption Revoked Approximately 275,000 organizations automatically lost their tax-exempt status recently because they did not file required annual reports for three consecutive years, as required by law. Donations made prior to an organization’s automatic revocation remain tax-deductible. Going forward, however, organizations that are on the auto-revocation list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions.

For the list of organizations whose tax-exempt status was revoked, visit www.IRS.gov. For general information see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property. These publications are available at www.IRS.gov or by calling 800-TAX-FORM (800-829-3676).

A charities organizational annual Date Of Gift message:

In the United States the IRS does not require any date of gift on acknowledgments/receipts. In Canada two dates are required: the date you received the gift and the date you printed the receipt. NOWHERE IS A "DATE OF GIFT" REQUIRED IN EITHER COUNTRY. In the most recent version of IRS Publication 1771, however, the IRS does suggest providing a "n." My personal preference, however, remains "date processed." The acceptability of reflecting a processed date has been confirmed with the IRS.

We are often faced with the dilemma of donors sending in last minute end-of-year contributions and being frustrated when they get a receipt mentioning a "gift date" in January. I would be too. In fact, it is not the donee's responsibility to assign a date of gift. That responsibility clearly falls on the donor. Were you, as a donee, to state a gift date on a receipt you could, in theory, be required to produce evidence supporting that date during an IRS audit of one of your donors. Stating gift dates on receipts would necessitate your keeping envelopes with postmarks, for example, for the required IRS statute of limitations. That is why the only time I suggest mentioning a gift date is for gifts of securities IF you feel like providing a value for them (not required per IRS Publication 1771 as securities are gifts of property). However, if you choose to do so, make sure that you include a disclaimer advising the donor that the value - and date - are being used for internal purposes only and to seek official guidance from their tax advisor. My suggested receipt language for these instances is as follows:

"Thank you for your gift of X shares of Y stock, which we have valued for our internal purposes only at $Z as of MM/DD/YY. For tax purposes you will want to seek guidance from a tax professional in determining your deductible amount."

Duke University, during my nearly 15 years there, rarely received a complaint from a donor about showing a processed date and not a gift date. The phone calls literally went away 15 years ago when, for the first two weeks of January, Duke began including the following message on receipts in lieu of the normal fund, department, or school-based message and/or signature (I believe Duke no longer even needs to add this reminder):

"May we remind you that the date above reflects when we processed your gift, and does not imply the date your gift was made. While you should consult with your CPA or tax preparer to determine the tax consequences of your donation, the date you delivered or mailed your donation is generally recognized as the gift date. The determination of the contribution date is entirely your decision. Should you have any questions concerning this matter, please contact me."

Don't get caught up trying to ascertain gift dates for your donors. But, since I am asked "When is a gift a gift?" every year, here are some common answers, and misconceptions:

The date on the check HAS NOTHING TO DO WITH REALITY. It's not a legal date of anything. Why some institutions find a need to record this date in their system is unclear (although many software packages include this field). Entering this date is a waste of time, IMHO, and certainly cannot be used to represent the date of gift, the date received, or the date processed. To save data input efforts, and to standardize gift processing, the only date I suggest you reflect for most gifts is the date the gift was entered on your system - which is usually automatically inserted - hence the phrase "processed date" recommendation I offer.

The customary "legal" date of gift for mailed contributions is the date of postmark. This, however, is not true for metered mail. Nor does a postmark reflect the legal date of gift for some other, non-cash, forms of gifts like credit card and stock donations. For credit cards, regardless of when or how the donor tells you to debit their account, the legal gift date is the date the charge hits their account. For stock, things get a bit more complicated. If the donor mails it in, the gift date is the later of the two USPS (not metered) postmarks for the certificate and stock power. If DTCed, it's the date of DTC and NOT THE DATE THE DONOR TOLD THEIR BROKER TO TRANSFER THE GIFT. For the gift to be consummated the stock MUST be registered in your name or in the control of you or your legal agent.

For items sent via third parties, like FedEx and UPS, the gift date is the date you sign for, or take into your possession, the package, not the date it was sent (a donor can recall items "mailed" this way until you have signed for it - thus the item is still in their control until control is yours).

From Crescendo regarding gifts by check: "These "check" rules apply despite the fact taxpayers could hypothetically stop payment on the check and negate the actual gift. One word of caution: postdated checks are not deductible when hand delivered or mailed. A postdated check is a promise to pay in the future and, thus, not deductible at time of delivery."

From Crescendo regarding credit card gifts: "Gifts by credit card are deductible in the year when the charges are made on the card owner's account."

From Crescendo regarding electronic delivery of stock gifts (dealing with a broker not acting on a transfer request when it is made): "Stocks are frequently transferred by electronic delivery. For instance, stocks are usually held in "street accounts" with financial services firms. While a taxpayer may irrevocably instruct his or her broker to

transfer the stock to charity, the gift is not complete until the stock is delivered to the charity's account. This means that the gift date for tax purposes may be days and possibly even weeks after the taxpayer's instructions to transfer. This poses a potential problem to last minute charitable contributions."

I hope everyone has a happy holiday season and few, if any, frustrated donors! Feel free to call/write if you have specific questions. A more "official" source than me for this topic is IRS publication 526 as well as IRS Publication 1771.

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

Donate Cars Charity

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