Charitable Giving Tips

Watch out for fundraising phone calls. Charity telemarketers may keep up to 80% of the money they raise, whereas 100% of the money raised by volunteers usually goes to the charity.

Make sure that you maximize deduction amounts. All items donated to a charity should be documented and accurately valued based on condition. Use a valuation guide in order to maximize contribution amounts.

Save all charitable donation receipts and back-up documentation for a full six years after filing your tax return since they serve as proof of donations made.

Donating Cars

One can only deduct the fair market value on cars (i.e. what the vehicle would actually sell for to the public based on mileage and condition) regardless of what the Blue Book says. Beginning January 1, 2005 the deduction allowed for donated vehicles with a claimed value in excess of $500 is either the amount that the charitable organization realizes from selling the vehicle or if the vehicle is used by the charitable organization, the fair market value of the vehicle. One must also substantiate the contribution with a contemporaneous written acknowledgement from the charitable organization.

Securities Donations

When appreciated stock is donated, as long as you have owned the shares for over one year, you will generally receive a tax deduction for the full value of the marketable securities and avoid the capital gains tax on profits.
For depreciated securities, you should consider selling the depreciated securities to take the tax loss first and then give the cash to a charity.

Donating Computers & Property Used in a Business

In addition to deducting the value of computer and peripherals donated, you may be entitled to deduct warehouse or shipping costs.

When gifting computers, autos, or any other property that has been used in a business to a charity, the charitable contribution amount is limited to the remaining undepreciated basis, not fair market value.