Home Page

Search Winona Post:
   GO   x 
Advanced Search
     
  Issue Date:  
  Between  
  and  
     
  Author:  
   
     
  Column / Category:  
   
     
  Issue:  
  Current Issue  
  Past Issues  
  Both  
   Help      Close     GO   Clear   
     
  Saturday October 25th, 2014    

 Submit Your Event 
S M T W T F S


 

 

 
 

| PLACE CLASSIFIED AD | PLACE EMPLOYMENT AD |

| Home | Advertise with Us | Circulation | Contact Us | About Us | Send a Letter to the Editor |
 

  (ARCHIVES)Back to Current
Money Management (10/24/2007)
Donating Property Can Provide Tax Relief

Cash isn't the only way you can help your favorite charity. Many organizations accept gifts of used clothing, household items, and cars, as well as stocks, mutual funds, collectibles, and works of art. In addition to helping out the charity, making a gift of property often means you can qualify for a tax deduction, reports Minnesota Society of CPAs (MNCPA).

Generally, when you contribute property (anything other than money or publicly traded securities) to a qualified charitable organization, you may deduct the itemís fair market value. But there are new rules for some types of donated property, so itís important that you understand the details.

Clothing and household items must be in good condition

When you donate clothing and household items, such as appliances, furniture, linens, and similar items, you generally may deduct the fair market value of the goods. But under a provision of the Pension Protection Act, passed in 2006, contributions of these items after August 17, 2006 must be in good used condition or better to qualify for a deduction. That means there ís no deduction for that microwave oven that no longer works or the shirt with holes in the sleeves.

To substantiate your deduction in the event you are audited, you might want to take photographs or film the items. You might also ask the organization for a receipt that attests to the fact that the items you donated were in good used condition.

One exception to this rule: you can take a deduction for a contribution of a single item of clothing or household item that is valued at $500 or more and include a qualified appraisal of it with your return.

Gifts of appreciated securities

Donating appreciated stocks is a great way to help your favorite charity and get a deduction in return. When you donate stocks or mutual fund shares you have held for more than one year, generally you may deduct the stocksí current fair market value. Additionally, you avoid paying capital gains taxes on the appreciated value.

Special rules apply to property valued at more than $500

If you donate noncash property that is valued at more than $500, you need to report to the IRS how and when you acquired the property and your cost basis. You must file Form 8283, Noncash

Charitable Contributions, for all donations of property valued at more than $500.

It ís a good idea to ask the recipient to provide you with documentation specifying how the property will be used. If the property you donate is used by the organization to carry out its work or is given to a needy individual, you may deduct its full market value. An example would be a car that you donate which is used to deliver meals to shut-ins. On the other hand, if the car is sold by the charity, your deduction is limited to the vehicleís sale price.

New recapture rule applies to gifts of $5000+

Donations of tangible property valued at more than $5,000 generally require a written appraisal from a qualified appraiser who must also sign Form 8283, Section B, Part III. The organization accepting the donation is required to provide written confirmation of any value that the donor received in exchange.

There is also a new reporting rule in effect for donations of art (or other appreciated tangible personal property)made after September 1, 2006. A deduction claimed for fair market value may be recaptured if a charity sells the property within three years.

 

 

   Copyright 2014, Winona Post, All Rights Reserved.

 

Send this article to a friend:
Your Email: *
Friend's Email: *
 Submit 
 Back Next Page >>

 

  | PLACE CLASSIFIED AD | PLACE EMPLOYMENT AD |

| Home | Advertise with Us | Circulation | Contact Us | About Us | Send a Letter to the Editor |
 

Contact Us to
Advertise in the
Winona Post!