IRS Releases Publication 526 (2016), Charitable Contributions

 

RECORDS: You must keep records showing the time, place, date, amount, and nature of the expenses. For details, see Revenue Procedure 2006-50, 2006-47 I.R.B. 944, available at http://www.irs.gov/irb/2006-47_IRB/ar12.html.

Contributions You Can't Deduct

There are some contributions you can't deduct and others you can deduct only in part.

You can't deduct as a charitable contribution:

 

Detailed discussions of these items follow.

Contributions to Individuals

You can't deduct contributions to specific individuals, including the following.

 

Example. You can deduct contributions to a qualified organization for flood relief, hurricane relief, or other disaster relief. However, you cannot deduct contributions earmarked for relief of a particular individual or family.

 

Example. Your son does missionary work. You pay his expenses. You can't claim a deduction for your son's unreimbursed expenses related to his contribution of services.

 

Contributions to Nonqualified Organizations

You can't deduct contributions to organizations that aren't qualified to receive tax-deductible contributions, including the following.

 

Contributions From Which You Benefit

If you receive or expect to receive a financial or economic benefit as a result of making a contribution to a qualified organization, you can't deduct the part of the contribution that represents the value of the benefit you receive. See Contributions From Which You Benefit under Contributions You Can Deduct, earlier. These contributions include the following.

 

Example. You donate money to a charitable organization. The charity uses the money to purchase a cash value life insurance policy. The beneficiaries under the insurance policy include members of your family. Even though the charity may eventually get some benefit out of the insurance policy, you can't deduct any part of the donation.

Qualified Charitable Distributions

A qualified charitable distribution (QCD) is a distribution made directly by the trustee of your individual retirement arrangement (IRA), other than a SEP or SIMPLE IRA, to certain qualified organizations. You must have been at least age 70 1/2 when the distribution was made. Your total QCDs for the year can't be more than $100,000. If all the requirements are met, a QCD is nontaxable, but you can't claim a charitable contribution deduction for a QCD. See Pub. 590-B, Distributions from Individual Retirement Arrangements (IRAs), for more information about QCDs.

Value of Time or Services

You can't deduct the value of your time or services, including:

 

Personal Expenses

You can't deduct personal, living, or family expenses, such as the following items.

 

Appraisal Fees

You can't deduct as a charitable contribution any fees you pay to find the fair market value of donated property. But you can claim them, subject to the 2%-of-adjusted-gross-income limit, as a miscellaneous itemized deduction on Schedule A (Form 1040). See Deductions Subject to the 2% Limit in Pub. 529 for more information.

Contributions to Donor-Advised Funds

You can't deduct a contribution to a donor-advised fund if:

 

There are also other circumstances in which you can't deduct your contribution to a donor-advised fund.

Generally, a donor-advised fund is a fund or account in which a donor can, because of being a donor, advise the fund how to distribute or invest amounts held in the fund. For details, see Internal Revenue Code section 170(f)(18).

Partial Interest in Property

Generally, you can't deduct a contribution of less than your entire interest in property. For details, see Partial Interest in Property under Contributions of Property, later.

Contributions of Property

If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. See Giving Property That Has Increased in Value, later.

For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report, later.

Contributions Subject to Special Rules

Special rules apply if you contribute:

 

These special rules are described next.

Clothing and Household Items

You can't take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better.

Exception. You can take a deduction for a contribution of an item of clothing or a household item that isn't in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return.

Household items. Household items include:

 

Household items don't include:

 

Fair market value. To determine the fair market value of these items, use the rules under Determining Fair Market Value, later.

Cars, Boats, and Airplanes

The following rules apply to any donation of a qualified vehicle.

A qualified vehicle is:

 

Deduction more than $500. If you donate a qualified vehicle with a claimed fair market value of more than $500, you can deduct the smaller of:

 

Form 1098-C. You must attach to your return Copy B of the Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes (or other statement containing the same information as Form 1098-C) you received from the organization. The Form 1098-C (or other statement) will show the gross proceeds from the sale of the vehicle.

If you e-file your return, you must:

 

If you don't attach Form 1098-C (or other statement), you can't deduct your contribution.

You must get Form 1098-C (or other statement) within 30 days of the sale of the vehicle. But if exception 1 or 2 (described later) applies, you must get Form 1098-C (or other statement) within 30 days of your donation.

Filing deadline approaching and still no Form 1098-C. If the filing deadline is approaching and you still don't have a Form 1098-C, you have two choices.

 

Exceptions. There are two exceptions to the rules just described for deductions of more than $500.

Exception 1--Vehicle used or improved by organization. If the qualified organization makes a significant intervening use of or material improvement to the vehicle before transferring it, you generally can deduct the vehicle's fair market value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies.

Exception 2--Vehicle given or sold to needy individual. If the qualified organization will give the vehicle, or sell it for a price well below fair market value, to a needy individual to further the organization's charitable purpose, you generally can deduct the vehicle's fair market value at the time of the contribution. But if the vehicle's fair market value was more than your cost or other basis, you may have to reduce the fair market value to get the deductible amount, as described under Giving Property That Has Increased in Value, later. The Form 1098-C (or other statement) will show whether this exception applies.

This exception doesn't apply if the organization sells the vehicle at auction. In that case, you can't deduct the vehicle's fair market value.

Example. Anita donates a used car to a qualified organization. She bought it 3 years ago for $9,000. A used car guide shows the fair market value for this type of car is $6,000. However, Anita gets a Form 1098-C from the organization showing the car was sold for $2,900. Neither exception 1 nor exception 2 applies. If Anita itemizes her deductions, she can deduct $2,900 for her donation. She must attach Form 1098-C and Form 8283 to her return.

Deduction $500 or less. If the qualified organization sells the vehicle for $500 or less and exceptions 1 and 2 don't apply, you can deduct the smaller of:

 

If the vehicle's fair market value is at least $250 but not more than $500, you must have a written statement from the qualified organization acknowledging your donation. The statement must contain the information and meet the tests for an acknowledgment described under Deductions of at Least $250 but Not More Than $500 under Records To Keep, later.

Fair market value. To determine a vehicle's fair market value, use the rules described under Determining Fair Market Value, later.

Donations of inventory. The vehicle donation rules just described don't apply to donations of inventory. For example, these rules don't apply if you are a car dealer who donates a car you had been holding for sale to customers. See Inventory, later.

Taxidermy Property

If you donate taxidermy property to a qualified organization, your deduction is limited to your basis in the property or its fair market value, whichever is less. This applies if you prepared, stuffed, or mounted the property or paid or incurred the cost of preparing, stuffing, or mounting the property.

Your basis for this purpose includes only the cost of preparing, stuffing, and mounting the property. Your basis doesn't include transportation or travel costs. It also doesn't include the direct or indirect costs for hunting or killing an animal, such as equipment costs. In addition, it doesn't include the value of your time.

Taxidermy property means any work of art that:

 

Property Subject to a Debt

If you contribute property subject to a debt (such as a mortgage), you must reduce the fair market value of the property by:

This prevents you from deducting the same amount as both investment interest and a charitable contribution.

If the recipient (or another person) assumes the debt, you must also reduce the fair market value of the property by the amount of the outstanding debt assumed.

The amount of the debt is also treated as an amount realized on the sale or exchange of property for purposes of figuring your taxable gain (if any). For more information, see Bargain Sales under Giving Property That Has Increased in Value, later.

Partial Interest in Property

Generally, you can't deduct a charitable contribution of less than your entire interest in property.

Right to use property. A contribution of the right to use property is a contribution of less than your entire interest in that property and isn't deductible.

Example 1. You own a 10-story office building and donate rent-free use of the top floor to a charitable organization. Because you still own the building, you have contributed a partial interest in the property and can't take a deduction for the contribution.

Example 2. Mandy White owns a vacation home at the beach that she sometimes rents to others. For a fund-raising auction at her church, she donated the right to use the vacation home for 1 week. At the auction, the church received and accepted a bid from Lauren Green equal to the fair rental value of the home for 1 week. Mandy can't claim a deduction because of the partial interest rule. Lauren can't claim a deduction either, because she received a benefit equal to the amount of her payment. See Contributions From Which You Benefit, earlier.

Exceptions. You can deduct a charitable contribution of a partial interest in property only if that interest represents one of the following items.

 

Example. You keep the right to live in your home during your lifetime and give your church a remainder interest that begins upon your death. You can deduct the value of the remainder interest.

 

Example. You contribute voting stock to a qualified organization but keep the right to vote the stock. The right to vote is a substantial right in the stock. You haven't contributed an undivided part of your entire interest and can't deduct your contribution.

 

For information about how to figure the value of a contribution of a partial interest in property, see Partial Interest in Property Not in Trust in Pub. 561.

Fractional Interest in Tangible Personal Property

You can't deduct a charitable contribution of a fractional interest in tangible personal property unless all interests in the property are held immediately before the contribution by:

 

If you make an additional contribution later, the fair market value of that contribution will be determined by using the smaller of:

 

Tangible personal property is defined later under Future Interest in Tangible Personal Property. A fractional interest in property is an undivided portion of your entire interest in the property.

Example. An undivided one-quarter interest in a painting that entitles an art museum to possession of the painting for 3 months of each year is a fractional interest in the property.

Recapture of deduction. You must recapture your charitable contribution deduction by including it in your income if both of the following statements are true.

Recapture is also required if the qualified organization hasn't taken substantial physical possession of the property and used it in a way related to the organization's purpose during the period beginning on the date of the initial contribution and ending on the earlier of:

 

Additional tax. If you must recapture your deduction, you must also pay interest and an additional tax equal to 10% of the amount recaptured.

Qualified Conservation Contribution

A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes.

Qualified organization. For purposes of a qualified conservation contribution, a qualified organization is:

 

The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions.

A publicly supported charity is an organization of the type described in (1) under Types of Qualified Organizations, earlier, that normally receives a substantial part of its support, other than income from its exempt activities, from direct or indirect contributions from the general public or from governmental units.

Qualified real property interest. This is any of the following interests in real property.

 

Conservation purposes. Your contribution must be made only for one of the following conservation purposes.

 

Building in registered historic district. If a building in a registered historic district is a certified historic structure, a contribution of a qualified real property interest that is an easement or other restriction on the exterior of the building is deductible only if it meets all of the following conditions. If you claimed the rehabilitation credit for the building for any of the 5 years before the year of the contribution, your charitable deduction is reduced. For more information, see Form 3468, Investment Credit, and Internal Revenue Code section 170(f)(14).

If you claim a deduction of more than $10,000, your deduction won't be allowed unless you pay a $500 filing fee. See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. You may be able to deduct the filing fee as a miscellaneous itemized deduction, subject to the 2%-of-adjusted-gross-income limit, on Schedule A (Form 1040). See Deductions Subject to the 2% Limit in Pub. 529 for more information.

More information. For information about determining the fair market value of qualified conservation contributions, see Pub. 561. For information about the limits that apply to deductions for this type of contribution, see Limits on Deductions, later. For more information about qualified conservation contributions, see Regulations section 1.170A-14.

Future Interest in Tangible Personal Property

You can't deduct the value of a charitable contribution of a future interest in tangible personal property until all intervening interests in and rights to the actual possession or enjoyment of the property have either expired or been turned over to someone other than yourself, a related person, or a related organization. But see Fractional Interest in Tangible Personal Property, earlier, and Tangible personal property put to unrelated use, later.

Related persons include your spouse, children, grandchildren, brothers, sisters, and parents. Related organizations may include a partnership or corporation in which you have an interest, or an estate or trust with which you have a connection.

Tangible personal property. This is any property, other than land or buildings, that can be seen or touched. It includes furniture, books, jewelry, paintings, and cars.

Future interest. This is any interest that is to begin at some future time, regardless of whether it is designated as a future interest under state law.

Example. You own an antique car that you contribute to a museum. You give up ownership, but retain the right to keep the car in your garage with your personal collection. Because you keep an interest in the property, you can't deduct the contribution. If you turn the car over to the museum in a later year, giving up all rights to its use, possession, and enjoyment, you can take a deduction for the contribution in that later year.

Inventory

If you contribute inventory (property you sell in the course of your business), the amount you can deduct is the smaller of its fair market value on the day you contributed it or its basis. The basis of contributed inventory is any cost incurred for the inventory in an earlier year that you would otherwise include in your opening inventory for the year of the contribution. You must remove the amount of your charitable contribution deduction from your opening inventory. It isn't part of the cost of goods sold.

If the cost of donated inventory isn't included in your opening inventory, the inventory's basis is zero and you can't claim a charitable contribution deduction. Treat the inventory's cost as you would ordinarily treat it under your method of accounting. For example, include the purchase price of inventory bought and donated in the same year in the cost of goods sold for that year.

A special rule applies to certain donations of food inventory. See Food Inventory, later.

Patents and Other Intellectual Property

If you donate intellectual property to a qualified organization, your deduction is limited to the basis of the property or the fair market value of the property, whichever is smaller. Intellectual property means any of the following:

 

Additional deduction based on income. You may be able to claim additional charitable contribution deductions in the year of the contribution and years following, based on the income, if any, from the donated property.

The following table shows the percentage of income from the property that you can deduct for each of your tax years ending on or after the date of the contribution. In the table, "tax year 1," for example, means your first tax year ending on or after the date of the contribution. However, you can take the additional deduction only to the extent the total of the amounts figured using this table is more than the amount of the deduction claimed for the original donation of the property.

After the legal life of the intellectual property ends, or after the 10th anniversary of the donation, whichever is earlier, no additional deduction is allowed.

The additional deductions can't be taken for intellectual property donated to certain private foundations.

 ---------------------------------------

 

 Tax year          Deductible percentage

 

 ---------------------------------------

 

     1                     100%

 

 ---------------------------------------

 

     2                     100%

 

 ---------------------------------------

 

     3                      90%

 

 ---------------------------------------

 

     4                      80%

 

 ---------------------------------------

 

     5                      70%

 

 ---------------------------------------

 

     6                      60%

 

 ---------------------------------------

 

     7                      50%

 

 ---------------------------------------

 

     8                      40%

 

 ---------------------------------------

 

     9                      30%

 

 ---------------------------------------

 

    10                      20%

 

 ---------------------------------------

 

    11                      10%

 

 ---------------------------------------

 

    12                      10%

 

 ---------------------------------------

 

 

Reporting requirements. You must inform the organization at the time of the donation that you intend to treat the donation as a contribution subject to the provisions just discussed.

The organization is required to file an information return showing the income from the property, with a copy to you. This is done on Form 8899, Notice of Income From Donated Intellectual Property.

Determining Fair Market Value

This section discusses general guidelines for determining the fair market value of various types of donated property. Pub. 561 contains a more complete discussion.

Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts.

Used clothing. The fair market value of used clothing and other personal items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing.

You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops.

Also see Clothing and Household Items, earlier.

Example. Kristin donated a coat to a thrift store operated by her church. She paid $300 for the coat 3 years ago. Similar coats in the thrift store sell for $50. The fair market value of the coat is $50. Kristin's donation is limited to $50.

Household items. The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) aren't acceptable in determining value.

You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful. Don't include any of this evidence with your tax return.

If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art in Pub. 561.

Also see Clothing and Household Items, earlier.

Cars, boats, and airplanes. If you contribute a car, boat, or airplane to a charitable organization, you must determine its fair market value.

Boats. Except for small, inexpensive boats, the valuation of boats should be based on an appraisal by a marine surveyor or appraiser because the physical condition is critical to the value.

Cars. Certain commercial firms and trade organizations publish used car pricing guides, commonly called "blue books," containing complete dealer sale prices or dealer average prices for recent model years. The guides may be published monthly or seasonally, and for different regions of the country. These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. The prices aren't "official" and these publications aren't considered an appraisal of any specific donated property. But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area.

These publications are sometimes available from public libraries, or from the loan officer at a bank, credit union, or finance company. You can also find used car pricing information on the Internet.

To find the fair market value of a donated car, use the price listed in a used car guide for a private party sale, not the dealer retail value. However, the fair market value may be less if the car has engine trouble, body damage, high mileage, or any type of excessive wear. The fair market value of a donated car is the same as the price listed in a used car guide for a private party sale only if the guide lists a sales price for a car that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated car.

Example. You donate a used car in poor condition to a local high school for use by students studying car repair. A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. However, the guide shows the price for a private party sale of the car is only $750. The fair market value of the car is considered to be $750.

Large quantities. If you contribute a large number of the same item, fair market value is the price at which comparable numbers of the item are being sold.

Example. You purchase 500 bibles for $1,000. The person who sells them to you says the retail value of these bibles is $3,000. If you contribute the bibles to a qualified organization, you can claim a deduction only for the price at which similar numbers of the same bible are currently being sold. Your charitable contribution is $1,000, unless you can show that similar numbers of that bible were selling at a different price at the time of the contribution.

Giving Property That Has Decreased in Value

If you contribute property with a fair market value that is less than your basis in it, your deduction is limited to its fair market value. You can't claim a deduction for the difference between the property's basis and its fair market value.

Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551. You may want to see Pub. 551 if you contribute property that you:

 

Common examples of property that decrease in value include clothing, furniture, appliances, and cars.

Giving Property That Has Increased in Value

If you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.

Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551.

Different rules apply to figuring your deduction, depending on whether the property is:

 

Ordinary Income Property

Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined later, under Capital Gain Property) held 1 year or less.

Property used in a trade or business. Property used in a trade or business is considered ordinary income property to the extent of any gain that would have been treated as ordinary income because of depreciation had the property been sold at its fair market value at the time of contribution. See chapter 3 of Pub. 544, Sales and Other Dispositions of Assets, for the kinds of property to which this rule applies.

Amount of deduction. The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Generally, this rule limits the deduction to your basis in the property.

Example. You donate stock you held for 5 months to your church. The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation).

Exception. Don't reduce your charitable contribution if you include the ordinary or capital gain income in your gross income in the same year as the contribution. See Ordinary or capital gain income included in gross income under Capital Gain Property, later, if you need more information.

Capital Gain Property

Property is capital gain property if you would have recognized long-term capital gain had you sold it at fair market value on the date of the contribution. Capital gain property includes capital assets held more than 1 year.

Capital assets. Capital assets include most items of property you own and use for personal purposes or investment. Examples of capital assets are stocks, bonds, jewelry, coin or stamp collections, and cars or furniture used for personal purposes.

For purposes of figuring your charitable contribution, capital assets also include certain real property and depreciable property used in your trade or business and, generally, held more than 1 year. You may, however, have to treat this property as partly ordinary income property and partly capital gain property. See Property used in a trade or business under Ordinary Income Property, earlier.

Real property. Real property is land and generally anything built on, growing on, or attached to land.

Depreciable property. Depreciable property is property used in business or held for the production of income and for which a depreciation deduction is allowed.

For more information about what is a capital asset, see chapter 2 of Pub. 544.

Amount of deduction--General rule. When figuring your deduction for a contribution of capital gain property, you generally can use the fair market value of the property.

Exceptions. However, in certain situations, you must reduce the fair market value by any amount that would have been long-term capital gain if you had sold the property for its fair market value. Generally, this means reducing the fair market value to the property's cost or other basis. You must do this if:

Contributions to private nonoperating foundations. The reduced deduction applies to contributions to all private nonoperating foundations other than those qualifying for the 50% limit, discussed later.

However, the reduced deduction doesn't apply to contributions of qualified appreciated stock. Qualified appreciated stock is any stock in a corporation that is capital gain property and for which market quotations are readily available on an established securities market on the day of the contribution. But stock in a corporation doesn't count as qualified appreciated stock to the extent you and your family contributed more than 10% of the value of all the outstanding stock in the corporation.

Tangible personal property put to unrelated use. Tangible personal property is defined earlier under Future Interest in Tangible Personal Property.

Unrelated use. The term "unrelated use" means a use unrelated to the exempt purpose or function of the charitable organization. For a governmental unit, it means the use of the contributed property for other than exclusively public purposes.

Example. If a painting contributed to an educational institution is used by that organization for educational purposes by being placed in its library for display and study by art students, the use isn't an unrelated use. But if the painting is sold and the proceeds are used by the organization for educational purposes, the use is an unrelated use.

Deduction limited. Your deduction for a contribution of tangible personal property may be limited. See (5) under Exceptions, earlier.

Recapture if no exempt use. You must recapture part of your charitable contribution deduction by including it in your income if all the following statements are true.

If all the preceding statements are true, include in your income:

 

Include this amount in your income for the year the qualified organization disposes of the property. Report the recaptured amount on Form 1040, line 21.

Ordinary or capital gain income included in gross income. You don't reduce your charitable contribution if you include the ordinary or capital gain income in your gross income in the same year as the contribution. This may happen when you transfer installment or discount obligations or when you assign income to a charitable organization. If you contribute an obligation received in a sale of property that is reported under the installment method, see Pub. 537, Installment Sales.

Example. You donate an installment note to a qualified organization. The note has a fair market value of $10,000 and a basis to you of $7,000. As a result of the donation, you have a short-term capital gain of $3,000 ($10,000 - $7,000), which you include in your income for the year. Your charitable contribution is $10,000.

Food Inventory

Special rules apply to certain donations of food inventory to a qualified organization. These rules apply if all the following conditions are met.

 

If all the conditions just described are met, use the following worksheet to figure your deduction.

Worksheet 1. Donations of Food Inventory See separate Worksheet instructions.

 (Keep for your records)

 

  1. Enter fair market value of the

 

     donated food                                ______

 

  2. Enter basis of the donated

 

     food                                        ______

 

  3. Subtract line 2 from line 1.

 

     If the result is zero or less, stop here.

 

     Don't complete the rest of this

 

     worksheet. Your charitable

 

     contribution deduction for food is the

 

     amount on line 1                            ______

 

  4. Enter one-half of line 3                    ______

 

  5. Subtract line 4 from line 1                 ______

 

  6. Multiply line 2 by 2.0                      ______

 

  7. Subtract line 6 from line 5. If the result

 

     is less than zero, enter -0-                ______

 

  8. Add lines 4 and 7                           ______

 

  9. Compare line 3 and line 8. Enter the

 

     smaller amount                              ______

 

 10. Subtract line 9 from line 1                 ______

 

 11. Enter 10% of your total net

 

     income for the year from

 

     all trades or businesses

 

     from which food

 

     inventory was donated                       ______

 

 12. Compare line 10 and line 11.

 

     Enter the smaller amount.

 

     This is your charitable

 

     contribution deduction

 

     for the food                                ______

 

 

Worksheet instructions. Enter on line 11 of the worksheet 10% of your net income for the year from all sole proprietorships, S corporations, or partnerships (or other entity that isn't a C corporation) from which contributions of food inventory were made. Figure net income before any deduction for a charitable contribution of food inventory.

If you made more than one contribution of food inventory, complete a separate worksheet for each contribution. Complete lines 11 and 12 on only one worksheet. On that worksheet, complete line 11. Then compare line 11 and the total of the line 10 amounts on all worksheets and enter the smaller of those amounts on line 12.

More information. See Inventory, earlier, for information about determining the basis of donated inventory and the effect on cost of goods sold. For additional details, see section 170(e)(3) of the Internal Revenue Code.

Bargain Sales

A bargain sale of property is a sale or exchange for less than the property's fair market value. A bargain sale to a qualified organization is partly a charitable contribution and partly a sale or exchange.

Part that is a sale or exchange. The part of the bargain sale that is a sale or exchange may result in a taxable gain. For more information on figuring the amount of any taxable gain, see Bargain sales to charity in chapter 1 of Pub. 544.

Part that is a charitable contribution. Figure the amount of your charitable contribution in three steps.

Step 1. Subtract the amount you received for the property from the property's fair market value at the time of sale. This gives you the fair market value of the contributed part.

Step 2. Find the adjusted basis of the contributed part. It equals:

                        Fair market value

 

                       of contributed part

 

 Adjusted basis of  ×  -------------------

 

 entire property        Fair market value

 

                       of entire property

 

 

Step 3. Determine whether the amount of your charitable contribution is the fair market value of the contributed part (which you found in Step 1) or the adjusted basis of the contributed part (which you found in Step 2). Generally, if the property sold was capital gain property, your charitable contribution is the fair market value of the contributed part. If it was ordinary income property, your charitable contribution is the adjusted basis of the contributed part. See Ordinary Income Property and Capital Gain Property, both earlier, for more information.

Example. You sell ordinary income property with a fair market value of $10,000 to a church for $2,000. Your basis is $4,000 and your adjusted gross income is $20,000. You make no other contributions during the year. The fair market value of the contributed part of the property is $8,000 ($10,000 - $2,000). The adjusted basis of the contributed part is $3,200 ($4,000 × ($8,000 ÷ $10,000)). Because the property is ordinary income property, your charitable deduction is limited to the adjusted basis of the contributed part. You can deduct $3,200.

Penalty

You may be liable for a penalty if you overstate the value or adjusted basis of contributed property.

20% penalty. The penalty is 20% of the amount by which you underpaid your tax because of the overstatement, if:

 

40% penalty. The penalty is 40%, rather than 20%, if:

 

When To Deduct

You can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year, as explained under How To Figure Your Deduction When Limits Apply, later). This applies whether you use the cash or an accrual method of accounting.

Time of making contribution. Usually, you make a contribution at the time of its unconditional delivery.

Checks. A check you mail to a charity is considered delivered on the date you mail it.

Text message. Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account.

Credit card. Contributions charged on your bank credit card are deductible in the year you make the charge.

Pay-by-phone account. Contributions made through a pay-by-phone account are considered delivered on the date the financial institution pays the amount. This date should be shown on the statement the financial institution sends you.

Stock certificate. A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn't delivered until the date the stock is transferred on the books of the corporation.

Promissory note. If you issue and deliver a promissory note to a charity as a contribution, it isn't a contribution until you make the note payments.

Option. If you grant a charity an option to buy real property at a bargain price, it isn't a contribution until the charity exercises the option.

Borrowed funds. If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan.

Conditional gift. If your contribution depends on a future act or event to become effective, you can't take a deduction unless there is only a negligible chance the act or event won't take place.

If your contribution would be undone by a later act or event, you can't take a deduction unless there is only a negligible chance the act or event will take place.

Example 1. You contribute cash to a local school board, which is a political subdivision of a state, to help build a school gym. The school board will refund the money to you if it doesn't collect enough to build the gym. You can't deduct your contribution until there is no chance (or only a negligible chance) of a refund.

Example 2. You donate land to a city for as long as the city uses it for a public park. The city plans to use the land for a park, and there is no chance (or only a negligible chance) of the land being used for any different purpose. You can deduct your charitable contribution.

Limits on Deductions

For 2016, the total of your charitable contributions deduction and certain other itemized deductions may be limited if your adjusted gross income is more than:

 

This is in addition to the other limits described here. See the Instructions for Schedule A (Form 1040) for more information about this limit.

TIP: If your total contributions for the year are 20% or less of your adjusted gross income, you don't need to read the rest of this section. The remaining limits discussed in this section don't apply to you.

The amount you can deduct for charitable contributions generally is limited to 50% of your adjusted gross income. Your deduction may be further limited to 30% or 20% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. A higher limit applies to certain qualified conservation contributions. These limits are described in detail in this section.

Your adjusted gross income is the amount on Form 1040, line 38.

If your contributions are more than any of the limits that apply, see Carryovers under How To Figure Your Deduction When Limits Apply, later.

Out-of-pocket expenses. Amounts you spend performing services for a charitable organization may be deductible as a contribution to a qualified organization. If so, your deduction is subject to the limit applicable to donations to that organization. For example, the 50% limit applies to amounts you spend on behalf of a church, a 50% limit organization.

50% Limit

The 50% limit applies to the total of all charitable contributions you make during the year. This means that your deduction for charitable contributions can't be more than 50% of your adjusted gross income for the year. But there is a higher limit, discussed later, for certain qualified conservation contributions.

Only limit for 50% organizations. The 50% limit is the only percentage limit that applies to contributions to organizations listed under 50% Limit Organizations. But there is one exception.

Exception. A special 30% limit applies to contributions of capital gain property if you figure your deduction using fair market value without reduction for appreciation. (See Special 30% Limit for Capital Gain Property, later.)

50% Limit Organizations

You can ask any organization whether it is a 50% limit organization, and most will be able to tell you. Also see How to check whether an organization can receive deductible charitable contributions, earlier.

Only the following types of organizations are 50% limit organizations.

 

30% Limit

A 30% limit applies to the following contributions.

 

However, if these contributions are of capital gain property, they are subject to the 20% limit, described later, rather than the 30% limit.

Student living with you. Deductible amounts you spend on behalf of a student living with you are subject to the 30% limit. These amounts are considered a contribution for the use of a qualified organization. See Expenses Paid for Student Living With You, earlier.

Special 30% Limit for Capital Gain Property

A special 30% limit applies to contributions of capital gain property to 50% limit organizations. (For contributions of capital gain property to other organizations, see 20% Limit, later.) However, the special 30% limit doesn't apply when you choose to reduce the fair market value of the property by the amount that would have been long-term capital gain if you had sold the property. Instead, only the 50% limit applies. See Capital Gain Property, earlier, and Capital gain property election under How To Figure Your Deduction When Limits Apply, later.

Also, the special 30% limit doesn't apply to qualified conservation contributions, discussed later.

Two separate 30% limits. This special 30% limit for capital gain property is separate from the other 30% limit. Therefore, the deduction of a contribution subject to one 30% limit doesn't reduce the amount you can deduct for contributions subject to the other 30% limit. However, the total you deduct can't be more than 50% of your adjusted gross income.

Example. Your adjusted gross income is $50,000. During the year, you gave capital gain property with a fair market value of $15,000 to a 50% limit organization. You don't choose to reduce the property's fair market value by its appreciation in value. You also gave $10,000 cash to a qualified organization that isn't a 50% limit organization. The $15,000 contribution of property is subject to the special 30% limit. The $10,000 cash contribution is subject to the other 30% limit. Both contributions are fully deductible because neither is more than the 30% limit that applies ($15,000 in each case) and together they aren't more than the 50% limit ($25,000).

20% Limit

The 20% limit applies to all contributions of capital gain property to or for the use of qualified organizations (other than contributions of capital gain property to 50% limit organizations).

Special 50% Limit for Qualified Conservation Contributions

Your deduction for qualified conservation contributions (QCCs) is limited to 50% of your adjusted gross income minus your deduction for all other charitable contributions. You can carry over any contributions you aren't able to deduct for 2016 because of this limit. See Carryovers, later.

100% limit for QCCs of farmers and ranchers. If you are a qualified farmer or rancher, your deduction for QCCs is limited to 100%, rather than 50%, of your adjusted gross income minus your deduction for all other charitable contributions. However, if the donated property is used in agriculture or livestock production (or is available for such production), the contribution must be subject to a restriction that the property remain available for such production. If not, the limit is 50%.

Qualified farmer or rancher. You are a qualified farmer or rancher if your gross income from the trade or business of farming is more than 50% of your gross income for the year.

How To Figure Your Deduction When Limits Apply

If your contributions are subject to more than one of the limits just discussed, deduct them as follows.

 

You also may want to use Worksheet 2 to figure your deduction and your carryover.

Example. Your adjusted gross income is $50,000. In March, you gave your church $2,000 cash and land with a fair market value of $28,000 and a basis of $22,000. You held the land for investment purposes for more than 1 year. You don't make the capital gain property election for this year. See Capital gain property election, later. Therefore, the amount of your charitable contribution for the land would be its fair market value of $28,000. You also gave $5,000 cash to a private foundation to which the 30% limit applies.

The $2,000 cash donated to the church is considered first and is fully deductible. Your contribution to the private foundation is considered next. Because your contributions to 50% limit organizations ($2,000 + $28,000) are more than $25,000 (50% of $50,000), your contribution to the private foundation isn't deductible for the year. It can be carried over to later years. See Carryovers, later. The contribution of land is considered next. Your deduction for the land is limited to $15,000 (30% × $50,000). The unused part of the contribution ($13,000) can be carried over. For this year, your deduction is limited to $17,000 ($2,000 + $15,000).

Capital gain property election. You may choose the 50% limit for contributions of capital gain property to 50% limit organizations instead of the 30% limit that would otherwise apply. If you make this choice, you must reduce the fair market value of the property contributed by the appreciation in value that would have been long-term capital gain if the property had been sold.

This choice applies to all capital gain property contributed to 50% limit organizations during a tax year. It also applies to carryovers of this kind of contribution from an earlier tax year. For details, see Carryover of capital gain property, later.

You must make the choice on your original return or on an amended return filed by the due date for filing the original return.

Example. In the previous example, if you choose to have the 50% limit apply to the land (the 30% capital gain property) given to your church, you must reduce the fair market value of the property by the appreciation in value. Therefore, the amount of your charitable contribution for the land would be its basis to you of $22,000. You add this amount to the $2,000 cash contributed to the church. You can now deduct $1,000 of the amount donated to the private foundation because your contributions to 50% limit organizations ($2,000 + $22,000) are $1,000 less than the 50%-of-adjusted-gross-income limit. Your total deduction for the year is $25,000 ($2,000 cash to your church, $22,000 for property donated to your church, and $1,000 cash to the private foundation). You can carry over to later years the part of your contribution to the private foundation that you couldn't deduct ($4,000).

Instructions for Worksheet 2

You can use Worksheet 2 if you made charitable contributions during the year, and one or more of the limits described in this publication under Limits on Deductions apply to you. You can't use this worksheet if you have a carryover of a charitable contribution from an earlier year. If you have a carryover from an earlier year, see Carryovers next.

The following list gives instructions for completing the worksheet.

 

Worksheet 2. Applying the Deduction Limits

 Keep for your records

 

 If the result on any line is less than zero, enter zero. For other

 

 instructions, see Instructions for Worksheet 2.

 

 Caution: Don't use this worksheet if you have a carryover of

 

 a charitable contribution from an earlier year.

 

 ----------------------------------------------------------------------

 

 Step 1. Enter any qualified conservation contributions (QCCs).

 

  1. If you are a qualified farmer or rancher, enter any

 

     QCCs eligible for the 100% limit                          1 ______

 

  2. Enter any QCCs not entered on line 1. Don't include

 

     this amount on line 3, 4, 5, 6, or 8                      2 ______

 

 Step 2. List your other charitable contributions made during the year.

 

  3. Enter your contributions to 50% limit organizations.

 

     (Include contributions of capital gain property if you

 

     reduced the property's fair market value. Don't

 

     include contributions of capital gain property

 

     deducted at fair market value.) Don't include any

 

     contributions you entered on line 1 or 2                  3 ______

 

  4. Enter your contributions to 50% limit organizations of

 

     capital gain property deducted at fair market value       4 ______

 

  5. Enter your contributions (other than of capital gain

 

     property) to qualified organizations that aren't 50%

 

     limit organizations                                       5 ______

 

  6. Enter your contributions "for the use of" any

 

     qualified organization. (But don't enter here any

 

     amount that must be entered on line 8.)                   6 ______

 

  7. Add lines 5 and 6                                         7 ______

 

  8. Enter your contributions of capital gain property to

 

     or for the use of any qualified organization. (But

 

     don't enter here any amount entered on line 3 or 4.)      8 ______

 

 Step 3. Figure your deduction for the year and your carryover to the

 

 next year.

 

  9. Enter your adjusted gross income                          9 ______

 

 10. Multiply line 9 by 0.5. This is your 50% limit           10 ______

 

     Contributions to 50% limit organizations                    Carry-

 

                                                                 over

 

 11. Enter the smaller of line 3 or

 

     line 10                            11            ______

 

 12. Subtract line 11 from line 3       12                       ______

 

 13. Subtract line 11 from line 10      13 ______

 

     Contributions not to 50% limit

 

     organizations

 

 14. Add lines 3 and 4                  14 ______

 

 15. Multiply line 9 by 0.3. This is

 

     your 30% limit                     15 ______

 

 16. Subtract line 14 from line 10      16 ______

 

 17. Enter the smallest of line 7, 15,

 

     or 16                              17            ______

 

 18. Subtract line 17 from line 7       18                       ______

 

 19. Subtract line 17 from line 15      19 ______

 

     Contributions of capital gain

 

     property to 50% limit

 

     organizations

 

 20. Enter the smallest of line 4, 13,

 

     or 15                              20            ______

 

 21. Subtract line 20 from line 4       21                       ______

 

 22. Subtract line 17 from line 16      22 ______

 

 23. Subtract line 20 from line 15      23 ______

 

     Other contributions

 

 24. Multiply line 9 by 0.2. This is

 

     your 20% limit                     24 ______

 

 25. Enter the smallest of line 8, 19,

 

     22, 23, or 24                      25            ______

 

 26. Subtract line 25 from line 8       26                       ______

 

 27. Add lines 11, 17, 20, and 25       27 ______

 

 28. Subtract line 27 from line 10      28 ______

 

 29. Enter the smaller of line 2 or

 

     line 28                            29            ______

 

 30. Subtract line 29 from line 2       30                       ______

 

 31. Add lines 27 and 29                31 ______

 

 32. Subtract line 31 from line 9       32 ______

 

 33. Enter the smaller of line 1 or line 32        33 ______

 

 34. Add lines 31 and 33. Enter the total here

 

     and on Schedule A (Form 1040), line 16 or

 

     line 17, whichever is appropriate             34 ______

 

 35. Subtract line 33 from line 1                  35            ______

 

 36. Add lines 12, 18, 21, 26, 30, and 35. Carry

 

     this amount forward to

 

     Schedule A (Form 1040) next year              36            ______

 

 ----------------------------------------------------------------------

 

 

 Carryovers

 

 

You can carry over any contributions you can't deduct in the current year because they exceed your adjusted-gross-income limits. You may be able to deduct the excess in each of the next 5 years until it is used up, but not beyond that time. Your total charitable deduction for the year to which you carry your contributions generally is limited to 50% of your adjusted gross income for that year.

A carryover of a qualified conservation contribution can be carried forward for 15 years.

Contributions you carry over are subject to the same percentage limits in the year to which they are carried. For example, contributions subject to the 20% limit in the year in which they are made are 20% limit contributions in the year to which they are carried. But see Carryover of capital gain property, later.

For each category of contributions, you deduct carryover contributions only after deducting all allowable contributions in that category for the current year. If you have carryovers from 2 or more prior years, use the carryover from the earlier year first.

Note. A carryover of a contribution to a 50% limit organization must be used before contributions in the current year to organizations other than 50% limit organizations. See Example 2.

Example 1. Last year, you made cash contributions of $11,000 to which the 50% limit applies, but because of the limit you deducted only $10,000 and carried over $1,000 to this year. This year, your adjusted gross income is $20,000 and you made cash contributions of $9,500 to which the 50% limit applies. You can deduct $10,000 (50% of $20,000) this year. Consequently, in addition to your contribution of $9,500 for this year, you can deduct $500 of your carryover contribution from last year. You can carry over the $500 balance of your carryover from last year to next year.

Example 2. This year, your adjusted gross income is $24,000. You make cash contributions of $6,000 to which the 50% limit applies and $3,000 to which the 30% limit applies. You have a contribution carryover from last year of $5,000 for capital gain property contributed to a 50% limit organization and subject to the special 30% limit for contributions of capital gain property.

Your contribution deduction for this year is limited to $12,000 (50% of $24,000). Your 50% limit cash contributions of $6,000 are fully deductible.

The deduction for your 30% limit contributions of $3,000 is limited to $1,000. This is the lesser of:

 

(The $12,000 amount is 50% of $24,000, your adjusted gross income. The $11,000 amount is the sum of your current and carryover contributions to 50% limit organizations, $6,000 + $5,000.)

The deduction for your $5,000 carryover is subject to the special 30% limit for contributions of capital gain property. This means it is limited to the smaller of:

 

Because your $5,000 carryover is less than both $7,200 and $6,000, you can deduct it in full.

Your deduction is $12,000 ($6,000 + $1,000 + $5,000). You carry over the $2,000 balance of your 30% limit contributions for this year to next year.

Carryover of capital gain property. If you carry over contributions of capital gain property subject to the special 30% limit and you choose in the next year to use the 50% limit and take appreciation into account, you must refigure the carryover. Reduce the fair market value of the property by the appreciation and reduce that result by the amount actually deducted in the previous year.

Example. Last year, your adjusted gross income was $50,000 and you contributed capital gain property valued at $27,000 to a 50% limit organization and didn't choose to use the 50% limit. Your basis in the property was $20,000. Your deduction was limited to $15,000 (30% of $50,000), and you carried over $12,000. This year, your adjusted gross income is $60,000 and you contribute capital gain property valued at $25,000 to a 50% limit organization. Your basis in the property is $24,000 and you choose to use the 50% limit. You must refigure your carryover as if you had taken appreciation into account last year as well as this year. Because the amount of your contribution last year would have been $20,000 (the property's basis) instead of the $15,000 you actually deducted, your refigured carryover is $5,000 ($20,000 - $15,000). Your total deduction this year is $29,000 (your $24,000 current contribution plus your $5,000 carryover).

Additional rules for carryovers. Special rules exist for computing carryovers if you:

 

Because of their complexity and the limited number of taxpayers to whom these additional rules apply, they aren't discussed in this publication. If you need to figure a carryover and you are in one of these situations, you may want to consult with a tax practitioner.

Records To Keep

You must keep records to prove the amount of the contributions you make during the year. The kind of records you must keep depends on the amount of your contributions and whether they are:

 

Note. An organization generally must give you a written statement if it receives a payment from you that is more than $75 and is partly a contribution and partly for goods or services. (See Contributions From Which You Benefit under Contributions You Can Deduct, earlier.) Keep the statement for your records. It may satisfy all or part of the recordkeeping requirements explained in the following discussions.

Cash Contributions

Cash contributions include those paid by cash, check, electronic funds transfer, debit card, credit card, or payroll deduction.

You can't deduct a cash contribution, regardless of the amount, unless you keep one of the following.

 

Payroll deductions. If you make a contribution by payroll deduction, you must keep:

 

If your employer withheld $250 or more from a single paycheck, see Contributions of $250 or More next.

Contributions of $250 or More

You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization or certain payroll deduction records.

If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions.

Amount of contribution. In figuring whether your contribution is $250 or more, don't combine separate contributions. For example, if you gave your church $25 each week, your weekly payments don't have to be combined. Each payment is a separate contribution.

If contributions are made by payroll deduction, the deduction from each paycheck is treated as a separate contribution.

If you made a payment that is partly for goods and services, as described earlier under Contributions From Which You Benefit, your contribution is the amount of the payment that is more than the value of the goods and services.

Acknowledgment. The acknowledgment must meet these tests.

If the acknowledgment doesn't show the date of the contribution, you must also have a bank record or receipt, as described earlier, that does show the date of the contribution. If the acknowledgment shows the date of the contribution and meets the other tests just described, you don't need any other records.

Payroll deductions. If you make a contribution by payroll deduction and your employer withholds $250 or more from a single paycheck, you must keep:

 

A single pledge card may be kept for all contributions made by payroll deduction regardless of amount as long as it contains all the required information.

If the pay stub, Form W-2, pledge card, or other document doesn't show the date of the contribution, you must have another document that does show the date of the contribution. If the pay stub, Form W-2, pledge card, or other document shows the date of the contribution, you don't need any other records except those just described in (1) and (2).

Noncash Contributions

For a contribution not made in cash, the records you must keep depend on whether your deduction for the contribution is:

 

Amount of deduction. In figuring whether your deduction is $500 or more, combine your claimed deductions for all similar items of property donated to any charitable organization during the year.

If you received goods or services in return, as described earlier in Contributions From Which You Benefit, reduce your contribution by the value of those goods or services. If you figure your deduction by reducing the fair market value of the donated property by its appreciation, as described earlier in Giving Property That Has Increased in Value, your contribution is the reduced amount.

Deductions of Less Than $250

If you make any noncash contribution, you must get and keep a receipt from the charitable organization showing:

 

A letter or other written communication from the charitable organization acknowledging receipt of the contribution and containing the information in (1), (2), and (3) will serve as a receipt.

You aren't required to have a receipt where it is impractical to get one (for example, if you leave property at a charity's unattended drop site).

Additional records. You must also keep reliable written records for each item of contributed property. Your written records must include the following information.

 

Deductions of at Least $250 but Not More Than $500

If you claim a deduction of at least $250 but not more than $500 for a noncash charitable contribution, you must get and keep an acknowledgment of your contribution from the qualified organization. If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that shows your total contributions.

The acknowledgment must contain the information in items (1) through (3) under Deductions of Less Than $250, earlier, and your written records must include the information listed in that discussion under Additional records.

The acknowledgment must also meet these tests.

Deductions Over $500 but Not Over $5,000

If you claim a deduction over $500 but not over $5,000 for a noncash charitable contribution, you must have the acknowledgment and written records described under Deductions of at Least $250 but Not More Than $500. Your records must also include:

 

If you have reasonable cause for being unable to provide information about the date you got the property or the cost basis of the property, attach a statement of explanation to your return.

Deductions Over $5,000

If you claim a deduction of over $5,000 for a noncash charitable contribution of one item or a group of similar items, you must have the acknowledgment and the written records described under Deductions Over $500 but Not Over $5,000. Generally, you must also obtain a qualified written appraisal of the donated property from a qualified appraiser. See Deductions of More Than $5,000 in Pub. 561 for more information.

In figuring whether your deduction is over $5,000, combine your claimed deductions for all similar items donated to any charitable organization during the year.

Qualified Conservation Contribution

If the contribution was a qualified conservation contribution, your records must also include the fair market value of the underlying property before and after the contribution and the conservation purpose furthered by the contribution.

For more information, see Qualified Conservation Contribution, earlier, and in Pub. 561.

Out-of-Pocket Expenses

If you give services to a qualified organization and have unreimbursed out-of-pocket expenses related to those services, the following two rules apply.

You must get the acknowledgment on or before the earlier of:

 

Car expenses. If you claim expenses directly related to use of your car in giving services to a qualified organization, you must keep reliable written records of your expenses. Whether your records are considered reliable depends on all the facts and circumstances. Generally, they may be considered reliable if you made them regularly and at or near the time you had the expenses.

For example, your records might show the name of the organization you were serving and the dates you used your car for a charitable purpose. If you use the standard mileage rate of 14 cents a mile, your records must show the miles you drove your car for the charitable purpose. If you deduct your actual expenses, your records must show the costs of operating the car that are directly related to a charitable purpose.

See Car expenses under Out-of-Pocket Expenses in Giving Services, earlier, for the expenses you can deduct.

How To Report

Report your charitable contributions on lines 16 through 19 of Schedule A (Form 1040).

If you made noncash contributions, you may also be required to fill out parts of Form 8283. See Noncash contributions, later.

Cash contributions and out-of-pocket expenses. Enter your cash contributions, including out-of-pocket expenses, on Schedule A (Form 1040), line 16.

Reporting expenses for student living with you. If you claim amounts paid for a student who lives with you, as described earlier under Expenses Paid for Student Living With You, you must submit with your return:

Noncash contributions. Enter your noncash contributions on Schedule A (Form 1040), line 17.

Total deduction over $500. If your total deduction for all noncash contributions for the year is over $500, you must complete Form 8283 and attach it to your Form 1040. Use Section A of Form 8283 to report noncash contributions for which you claimed a deduction of $5,000 or less per item (or group of similar items). Also use Section A to report contributions of publicly traded securities. See Deduction over $5,000 for one item, next, for the items you must report on Section B.

The IRS may disallow your deduction for noncash charitable contributions if it is more than $500 and you don't submit Form 8283 with your return.

Deduction over $5,000 for one item. You must complete Section B of Form 8283 for each item or group of similar items for which you claim a deduction of over $5,000. (However, if you contributed publicly traded securities, complete Section A instead.) In figuring whether your deduction for a group of similar items was more than $5,000, consider all items in the group, even if items in the group were donated to more than one organization. However, you must file a separate Form 8283, Section B, for each organization. The organization that received the property must complete and sign Part IV of Section B.

Vehicle donations. If you donated a car, boat, airplane, or other vehicle, you may have to attach a copy of Form 1098-C (or other statement) to your return. For details, see Cars, Boats, and Airplanes, earlier.

Clothing and household items not in good used condition. You must include with your return a qualified appraisal of any single donated item of clothing or any donated household item that isn't in good used condition or better and for which you deduct more than $500. See Clothing and Household Items, earlier.

Easement on building in historic district. If you claim a deduction for a qualified conservation contribution for an easement on the exterior of a building in a registered historic district, you must include a qualified appraisal, photographs, and certain other information with your return. See Qualified Conservation Contribution, earlier.

Deduction over $500,000. If you claim a deduction of more than $500,000 for a contribution of property, you must attach a qualified appraisal of the property to your return. This doesn't apply to contributions of cash, inventory, publicly traded stock, or intellectual property.

In figuring whether your deduction is over $500,000, combine the claimed deductions for all similar items donated to any charitable organization during the year.

If you don't attach the appraisal, you can't deduct your contribution, unless your failure to attach it is due to reasonable cause and not to willful neglect.

Form 8282. An organization must file Form 8282 if, within 3 years of receiving property for which it was required to sign a Form 8283, it sells, exchanges, consumes, or otherwise disposes of the property. The organization must also send you a copy of the form. However, the organization need not file Form 8282 to report the sale of an item if you signed a statement on Section B of Form 8283 stating that the appraised value of the item, or a specific item within a group of similar items, was $500 or less. For this purpose, all shares of nonpublicly traded stock or securities, or items that form a set (such as a collection of books written by the same author or a group of place settings), are considered to be one item.

How To Get Tax Help

If you have questions about a tax issue, need help preparing your tax return, or want to download free publications, forms, or instructions, go to IRS.gov and find resources that can help you right away.

Preparing and filing your tax return. Find free options to prepare and file your return on IRS.gov or in your local community if you qualify.

The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $54,000 or less, persons with disabilities, the elderly, and limited-English-speaking taxpayers who need help preparing their own tax returns. The Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older. TCE volunteers specialize in answering questions about pensions and retirement-related issues unique to seniors.

You can go to IRS.gov and click on the Filing tab to see your options for preparing and filing your return which include the following.

 

Getting answers to your tax law questions. On IRS.gov get answers to your tax questions anytime, anywhere.

 

Getting tax forms and publications. Go to IRS.gov/forms to view, download, or print all of the forms and publications you may need. You can also download and view popular tax publications and instructions (including the 1040 instructions) on mobile devices as an eBook at no charge. Or, you can go to IRS.gov/orderforms to place an order and have forms mailed to you within 10 business days.

Using direct deposit. The fastest way to receive a tax refund is to combine direct deposit and IRS e-file. Direct deposit securely and electronically transfers your refund directly into your financial account. Eight in 10 taxpayers use direct deposit to receive their refund. IRS issues more than 90% of refunds in less than 21 days.

Delayed refund for returns claiming certain credits. Due to changes in the law, the IRS can't issue refunds before February 15, 2017, for returns that claim the earned income credit (EIC) or the additional child tax credit (ACTC). This applies to the entire refund, not just the portion associated with these credits.

Getting a transcript or copy of a return. The quickest way to get a copy of your tax transcript is to go to IRS.gov/transcripts. Click on either "Get Transcript Online" or "Get Transcript by Mail" to order a copy of your transcript. If you prefer, you can:

 

Using online tools to help prepare your return. Go to IRS.gov/tools for the following.

 

Resolving tax-related identity theft issues.

 

Checking on the status of your refund.

 

Making a tax payment. The IRS uses the latest encryption technology to ensure your electronic payments are safe and secure. You can make electronic payments online, by phone, and from a mobile device using the IRS2Go app. Paying electronically is quick, easy, and faster than mailing in a check or money order. Go to IRS.gov/payments to make a payment using any of the following options.

 

What if I can't pay now? Go to IRS.gov/payments for more information about your options.

 

Checking the status of an amended return. Go to IRS.gov and click on Where's My Amended Return? (IRS.gov/wmar) under the "Tools" bar to track the status of Form 1040X amended returns. Please note that it can take up to 3 weeks from the date you mailed your amended return for it show up in our system and processing it can take up to 16 weeks.

Understanding an IRS notice or letter. Go to IRS.gov/notices to find additional information about responding to an IRS notice or letter.

Contacting your local IRS office. Keep in mind, many questions can be resolved on IRS.gov without visiting an IRS Tax Assistance Center (TAC). Go to IRS.gov/letushelp for the topics people ask about most. If you still need help, IRS TACs provide tax help when a tax issue can't be handled online or by phone. All TACs now provide service by appointment so you'll know in advance that you can get the service you need without waiting. Before you visit, go to IRS.gov/taclocator to find the nearest TAC, check hours, available services, and appointment options. Or, on the IRS2Go app, under the Stay Connected tab, choose the Contact Us option and click on "Local Offices."

Watching IRS videos. The IRS Video portal (IRSvideos.gov) contains video and audio presentations for individuals, small businesses, and tax professionals.

Getting tax information in other languages. For taxpayers whose native language isn't English, we have the following resources available. Taxpayers can find information on IRS.gov in the following languages.

 

The IRS TACs provide over-the-phone interpreter service in over 170 languages, and the service is available free to taxpayers.

The Taxpayer Advocate Service Is Here To Help You

What is the Taxpayer Advocate Service?

The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that helps taxpayers and protects taxpayer rights. Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights under the Taxpayer Bill of Rights.

What Can the Taxpayer Advocate Service Do For You?

We can help you resolve problems that you can't resolve with the IRS. And our service is free. If you qualify for our assistance, you will be assigned to one advocate who will work with you throughout the process and will do everything possible to resolve your issue. TAS can help you if:

 

How Can You Reach Us?

We have offices in every state, the District of Columbia, and Puerto Rico. Your local advocate's number is in your local directory and at taxpayeradvocate.irs.gov. You can also call us at 1-877-777-4778.

How Can You Learn About Your Taxpayer Rights?

The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS. Our Tax Toolkit at taxpayeradvocate.irs.gov can help you understand what these rights mean to you and how they apply. These are your rights. Know them. Use them.

How Else Does the Taxpayer Advocate Service Help Taxpayers?

TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to us at IRS.gov/sams.

Low Income Taxpayer Clinics

Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. To find a clinic near you, visit IRS.gov/litc or see IRS Publication 4134, Low Income Taxpayer Clinic List.