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(Part of a series of articles on charitable giving and the Union County Foundation by David Vollrath - Exec. Dir.) Missouri is known as the “show me” state. One could argue that the IRS should adopt that same slogan. The IRS has specific requirements regarding the proof needed to support claiming a charitable deduction on an income tax return. Some items are obvious, such as keeping cancelled checks for gifts made to charity. Charitable gifts that exceed $250 require more than a cancelled check. Such gifts require an actual receipt from the receiving charity. This receipt must be received by the donor prior to the due date of his/her tax return, including any time extensions. The receipt must indicate whether the gift was cash or property, the amount of the gift, and the value of any goods or services that have been received. The reason for declaring the value of any goods or services received back is to establish if the gift is fully deductible. Generally the value of goods received back must be deducted from the total gift amount. For example, if you gift $250 and receive back goods valued at $100 your allowed deduction is only $150. There are two exceptions to the “value back from charity” rule. The first is for minor mementos or “premiums” of minimal value received by the donor from the charity. The second is for an “intangible religious benefit.” For example, admission to a religious ceremony is an intangible religious benefit. If you give property to a charity your records should include the name of the charity, the date and city where the gift was made and a description of the property. You should also record the fair market value and the method used to determine that value. If the value of the donated property exceeds $500 then an IRS form 8283 for “noncash charitable contributions” is to be filed with your tax return. This form includes information such as how you acquired the property, what you paid for the property, and how long you have held the property. You should always consult a tax professional if you have questions. All the above rules are really pretty easy to follow and by doing so you can be assured of receiving the full tax benefit of your gifts....and if the IRS says “show me”, like a good Missourian, you will be able to do so. The Union County Foundation encourages you to consider your present and future charitable goals. The Foundation is equipped to help you achieve these goals by providing: planned giving and estate planning resource information, charitable gift annuities/life income plans, and a broad array of charitable choices. Please call us at 937-642-9618, email commfounduc@imetweb.net, reference our website at www.emarysville.com/unioncountyfoundation, or stop by our Marysville office at 126 N. Main St. We are committed to helping you.... “preserve your footprint in time.” |
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