The following is provided for those who would like more details about the giving ideas introduced here.

Making the Most of Deductions

In order to receive maximum income tax benefits from your charitable gifts, you must be in a position to itemize deductions on your income tax return. What if you don’t have enough deductions to qualify for itemization in a given year? By combining more than one year’s charitable gifts and other deductible expenditures into a single tax year, you may be able to boost your total deductions over the minimum amount required in order to itemize. As a result, it may be possible to reap a tax benefit from otherwise non-deductible charitable gifts and other expenses (such as property taxes on a home).

Carrying Over Excess Deductions

If you give more than the deductible limits for gifts in any one year, you may “carry over” any remaining deductions to be used in as many as the next five tax years.

Giving Appreciated Property

Property that has increased in value and been held for the long-term holding period defined by law (currently one year and a day) is generally deductible for its current market value up to 30% of your adjusted gross income (AGI). Exception: Tangible personal property (art, antiques, collections, jewelry, etc.) is deductible at full present value only if it is used in the furtherance of the recipient’s tax-exempt purpose. If not (for example, if it is to be resold immediately), your deduction is generally limited to the original price paid for the property or its current value, whichever is lower.

Appraisals: To claim a deduction for certain gifts of non-cash property, you will need to obtain a qualified appraisal of the property. A “qualified appraisal” is required when non-cash property gifts have a claimed value of more than $5,000 ($10,000 for gifts of closely held stock). Exception: Publicly traded securities, such as stocks and mutual funds. See IRS Form 8283 for details. Click here for the instructions and form in PDF format.

Gift substantiation rules: For all gifts of $250 or more, donors must now have a written acknowledgment and retain it with their tax records. Such acknowledgment information should be found in letters provided to you after your gift has been received. Therefore, it is more important than ever to keep any such letters among your records. You may risk having a deduction disallowed if you do not have proper substantiation. The IRS provides general information for taxpayers on the treatment of charitable contributions in its Publication 526. Click here to view a PDF version of this publication.

Guidelines for Drafting Charitable Trusts

In order to assure qualification for tax benefits, charitable trusts should be drafted by an attorney (as should wills and other legal documents).

To aid drafters of charitable remainder trusts, the IRS has issued specimen provisions to be included in the trust agreements. Many of these can be found in Rev. Proc. 2003-53 through 2003-60 and Rev. Proc. 2005-52 through 2005-59. Specimen forms for charitable lead trusts are available from research sources. Charitable trust forms that are preferred by particular fiduciaries are also typically available from them upon request.