Value of Tax Deductible Donations
Charitable donations are tax deductible only if you itemize your deductions, meaning you cannot claim the standard deduction. Cash donations deductions are limited to 50 percent of your taxable income.
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How to Value a Donation
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The value of the deduction is the amount of the donation minus anything you received in return, including thank-you gifts. For example, if you donated an $8,000 car and received a T-shirt valued at $15 in return, you could deduct $7,985 on your taxes.
Qualifying Organizations
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Donations are only deductible if they are made to qualifying organizations such as nonprofit hospitals and schools, public parks and religious organizations.
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When to Deduct
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Deductions are taken in the year that they are made. If you mail a check, the deduction is taken in the year the check is mailed, not when it is cashed.
Appraisals
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Appraisals are required by the IRS for any donation over $5,000. To claim a deduction of this size, you must fill out Section B of Form 8283.
Rights to Buy Tickets
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If you make a donation and are rewarded with the right to buy sporting event tickets, 80 percent of the donation is deductible. For example, if you donated $1,000 to your alma mater and you received the right to buy season basketball tickets, you could deduct $800. However, if you receive the actual tickets, you have to subtract the value of the tickets from the amount of the donation.
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