Donation Tax Deduction Value
The IRS allows individuals to deduct donations to charity organizations from their taxes if they itemize their deductions rather than taking the standard deduction. Charity organizations include nonprofit educational institutions, religious organizations and nonprofit hospitals.
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Value of the Donation
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The deductible value of the donation is the value of any monies or goods donated minus anything received in return. For example, if you donated $2,500 to your church and were invited on a weekend retreat valued at $200 because of the donation you could deduct $2,300 on your taxes.
Deduction Limits
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You are allowed to contribute as much as you want to charity but you can only deduct a percentage of your adjusted gross income each year. Deductions for cash contributions are capped at 50 percent, property is limited to 30 percent and capital gains are limited to 20 percent.
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Excess Deductions
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If you make charitable contributions that exceed your deduction limits, you may apply an excess contributions up to five years after the date of the donation. For example, if your adjusted gross income was $60,000 and you donated $40,000 cash to your temple, you could deduct $30,000 the first year and deduct the remaining $10,000 the following year.
Records of Donations
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For any donation valued at $250 or more, the receiving organization must issue a receipt stating what was given, how much it was worth, when it was given and if anything was received in return for the donation.
Official Appraisal
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An official appraisal must be performed on any gift valued at $5,000 or more. The IRS requires these appraisals to ensure values are not overstated.
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