Being generous counts and can offer donors great tax deductions, too. Donating that old treadmill, which has
been lying unused for years, might reap some tax benefits. Harley and Foster know this, so every year they
always keep track of what they are donating and the condition it was in when they donated items.

Most taxpayers donate far more dollar value than they realize, but they seldom keep track of it.

Generally, taxpayers will claim around $500 of non-cash donations, but if they keep track of their non-cash donations,
we find families donate closer to $3,000 worth. That means about $800 in tax refunds are being
lost every year! This type of deduction could save you hundreds or thousands of dollars each year, but you
must document your contributions. Keeping good records is what will always win in case of an audit.

This week, we will discuss non-cash contributions. Non-cash items are furniture, clothing, home appliances,
sporting goods, artwork, and any item you contribute other than cash, checks, or by credit card.

Generally, you can deduct your cash contributions and the Fair Market Value (FMV) of most property you
donate to a qualified charitable organization. Special rules apply to several types of donated property, including
clothing or household items, cars, and boats. If your contribution entitles you to receive merchandise, goods, or
services in return — such as admission to a charity banquet or a sporting event — you can deduct only the
amount that exceeds the FMV of the benefit received. FMV is generally the price you would get had you sold
the property in an open market. Usually, the receipt you receive for the donation will state how much that is.

To claim a deduction for donated property valued at $250 or more, you must have a written statement or
receipt from the charitable organization. It must show the amount of the donation and a description of the
property given. It must also say whether the charity provided any goods or services in exchange for the gift.

If you donate property, the receipt that you are given must include a description of the items and a good-faith
estimate of its value. For total non-cash items (food, clothes, electronics, computers, household goods,
furniture, etc.) valued at more than $500, you must complete Form 8283, Non-Cash Charitable
Contributions.

If you claim a deduction for a contribution of non-cash property worth more than $5,000 for any one item or
group of similar items, you must generally obtain a qualified appraisal, complete Section B of Form 8283, and
file it with your return. You must also attach a copy of the written appraisal to the tax return. If you file
electronically, you will attach a PDF of the appraisal to the tax return; otherwise, you can send in a written copy
of the appraisal when filing a paper tax return.

It’s a best practice to take pictures of items donated when giving away non-cash items (clothes, furniture,
household items, artwork, etc.), because this helps show the condition and the number of items donated. This
way, you can better prove the valuation amount used.

The Salvation Army has a website that is used to value items that are given to charitable organizations. Simply
go to www.salvationarmyusa.org and type in the word “valuation” in the search bar. You will see different
items that are given away and the valuation that has been accepted by the IRS for charitable donation
purposes, based on the condition of the item, for each item donated.

Here are some points to remember:

• Most families donate closer to $3,000 worth of non-cash items, but only claim around $500 on their tax
  returns
• Be sure to get a written receipt for any cash, check, or credit card contribution of $250 or more
• Use Form 8283 if the total amount of non-cash charitable donations is more than $500
• Take pictures of items donated, to prove the condition and the number of items given
• You will need a qualified written appraisal (stating that it is for tax purposes) if the value of the item or
  group of similar items being donated is more than $5,000
• Use the Salvation Army website (www.salvationarmyusa.org) to help determine the value of items
  donated
• Contact AZMONEYGUY for a Non-Cash Donations Checklist

Call today, don’t delay! See how this affects you. We can be reached at 602-264-9331 and on all social media under azmoneyguy.

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