Noncash charitable deductions allow taxpayers to deduct the fair market value of donated items on their tax returns. These steps can help ensure your charitable deductions are adequately substantiated and accepted by the IRS.
RECEIPTS EVERY TIME
Regardless of the value, you should have a receipt from the charity for any noncash donation. This document should include the charity’s name, the date and location of the contribution, and a reasonably detailed description of the donated property. Consider taking photos of donated items to document their condition.
HIGHER VALUE ITEMS
If the value of your noncash donations is over $500 for the tax year, you must also include IRS Form 8283 with your tax return. For each item or group of similar items valued over $500, you must provide additional details including when you acquired the item and its original cost.
GET AN APPRAISAL
If you’re donating an item or a group of similar items worth more than $5,000, you’ll generally need a qualified appraisal of the item’s fair market value, and you must also complete Section B of Form 8283. There are exceptions for publicly traded securities, vehicles, and intellectual property.