Contribution Rule Change for 2007
Beginning in 2007 the rules are changing just a bit for claiming
a deduction for contributions to charities. For example:
You normally drop money in the offering plate at church
each week and you plan to take a tax deduction for that.
Can you prove you made the gift?
You purchased some Girl Scout cookies. Great!
Now you want to take a deduction for the excess over the
value of those cookies.
OK, can you prove how much you paid for them?
This is a couple of examples of how this has now changed.
It appears that Congress perceived that there was tax abuse in this
area, so they modified the rules. Beginning in 2007, in order to take
a tax deduction for a cash contribution under $250, you will need
to have some third-party record of that. This could be in the form
of a receipt from the tax-exempt organization, or it can be a
cancelled check. But your own check register is insufficient.
For cash contributions of $250 or more, you will still need a receipt
from the tax-exempt organization. That has not changed.
Planning to give non-cash items? Wonderful! Organizations such as local
Rescue Missions and the
depend on these. But now, in
order to take a tax deduction for the gift, the item must be in good
condition unless you obtain a written appraisal for the gift.
If the total of non-cash gifts is over $500, then Form 8283 is still
required. This form is used to detail the items, including information
about when you aquired the item, how you arrived at the value, etc.
If the value is over $5,000 then a written appraisal is required.
And don't forget that there were recent changes relating to donations
of automobiles, and that is covered elsewhere.