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DONOR SUBSTANTIATION REQUIREMENTS

Effective January 1, 2007, the IRS revised its recordkeeping requirements with regard to deducting charitable contributions.  Taxpayer substantiation requirements can be found in IRS Publication 1771 (Substantiation & Disclosure Requirements).

WHAT IS THE VALUE OF MY NON-CASH CHARITABLE CONTRIBUTION

When donating non-cash items, the amount that can be deducted is, generally, the item's fair market value (FMV) which is determined by the DONOR and not the charitable organization.  FMV is the price at which an item would change hands between a willing buyer and a willing seller, both neither having to buy or sell, and both having reasonable knowledge of all relevant facts.  However, there are certain items that are valued using special rules; these items can be found in IRS Publication 526.

To calculate the fair market value of your donated items, click on any of the following links:

NON-DEDUCTIBLE CONTRIBUTIONS:

  • Contributions to specific individuals
  • Contributions to nonqualified organization including:
    • Certain state bar associations if 1) it is not a political subdivision of a state; 2) it has private, as well as public, purposes (i.e. promotion the professional interests of members); and 3) the contribution is unrestricted & can be used for private purposes;
    • Chambers of commerce & other business leagues or organizations
    • Civic leagues & associations
    • Communist organzations
    • Country clubs & other social clubs
    • Foreign organizations other than certain Canadian; Israeli or Mexcian charitable organizations
    • Homeowners' associations
    • Labor unions
    • Political organizations and candidates
  • The part of a contribution from which you receive or expect to receive a benefit (includes RAFFLES; BINGOS; LOTTERIES, FRATERNAL ORDER DUES, etc.)
  • Value of your time and/or services
  • Personal expenses
  • Qualified charitable distribution from an IRA
  • Appraisal fees
  • Certain contributions to donor-advised funds
  • Certain contributions of partial interests in property

QUALIFIED CHARITABLE ORGANIZATIONS

  • Community chest; corporation; trust; fund or foundation organized or created in or under the laws of the United States; any state; District of Columbia; or any U.S. that operates solely for charitable, religious, scientific, literary or educational purposes or for the prevention of cruelty to children or animals.  In addition, certain organizations that foster national or international amateur sports competition also qualify.
  • War veterans' organizations including posts, auxiliaries, trusts or foundations organized by the United States or any of its possessions
  • Domestic fraternal societies, orders & associations operating under the lodge system (contribution only deductible if it's to be used solely for charitable, religiouis, scientific, literary or educational purposes or for the prevention of cruelty to children or animals)
  • Certain nonprofit cemetery companeis or corporations (does not qualify for deduction if used for the care of a specific lot or mausoleum crypt)
  • United States or any state; the District of Columbia; U.S. possession or Indial tribal government or any of its subdivisions that perform substantial government functions (only deductible if used solely for public purposes)
  • Churches, convention of association of churches, temples, synagogues, mosques & other religious organizations
  • Most nonprofit charitable organizations (i.e. American Red Cross; United Way)
  • Most nonprofit education organizations including Boys Scouts of America; Girl Scouts of America; colleges; museums.  Also includes nonprofit daycare centers that provide childcare to the general public if substantially all the childcare is provided to enable parents and guardians to be gainfully employed.  If the contribution is a substitute for tuition or other enrollment fee, it does not qualify.
  • Nonprofit hospitals & medical research organizations
  • Utility company and emergency energy programs if the utility company is agent for a charitable organization that assists individuals with emergency energy needs;
  • Nonprofit volunteer fire companies
  • Nonprofit organizations that develop & maintain public parks & recreation facilities
  • Civil defense organizations

To find out if the tax-exempt status of an organization, you can perform a search on the IRS website at http://apps.irs.gov/app/eos/

GURIN & GURIN PC
PH: (586) 263.0505  |  FX: (586) 263.1428
38800 Garfield Rd Ste 120  |  Clinton Twp, MI  48038
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