Summer Tax Savings - Recordkeeping Requirements For Noncash Charitable Donations

The IRS does mandate the recordkeeping requirements for non-cash charitable contributions. The purpose of this article is to help you understand what those requirements are, so you can take a deduction for donating "old stuff" to charity, without any fear of an IRS audit.

Generally speaking, you must keep a written record of the following information for each gift:

1. Name of charitable organization
2. Date
3. Place
4. Description
5. Fair market value
6. Method of determining fair market value
7. Original cost

More specifically, the rules actually vary depending on the fair market value. And what about getting a receipt? Here's a more detailed explanation of the IRS' documentation rules:

1. Under $250: you don't need a receipt when you leave the donation at the organization's unattended drop-off location. But just to be safe, if the gift is under $250 and you can get a receipt, go ahead and get one.

2. $250 to $500: you must receive a written statement from the organization containing the following information:

• name of organization - address of organization - date - place - description - whether the donor received any goods or services in exchange for the donation and the fair market value of those goods or services

3. $501 to $5,000: you must receive a written statement from the organization with the same information listed above for a $250-$500 donation. Furthermore, you must also keep of record of when you bought the gift, its original purchase price, and how you bought it.

4. Greater than $5,000: you must have the same documentation as the $501-$5,000 donation, and you will probably also need a written appraisal. For details on this, see IRS Publication 561, Determining Value of Donated Property, available for free at the IRS website.