Charitable Contribution Documentation

Approximately 30% of annual charitable giving in the US occurs in December. As we enter the giving season, make sure you have the proper documentation to substantiate a gift for tax deduction purposes.

For all contributions of $250 or more, you must have a contemporaneous written acknowledgment (“CWA”) from the organization.  A CWA must include the following:

  • The amount of cash contributed.
  • A description of any noncash property contributed
  • Whether the recipient organization provided any goods or services to the donor in consideration for the contribution.
  • If the organization provides goods or services to the donor, a description and good faith estimate of the value of any goods or services provided.

If a taxpayer makes multiple gifts to the same organization during the year totaling more than $250, but each gift is less than $250, a CWA is not required unless the intent is to avoid the substantiation requirements. We recommend obtaining a CWA on all donations.

To claim a tax deduction, the donor must receive the CWA before the earlier of (1) the date the donor’s tax return is filed or (2) the due date for filing the tax return.

The IRS and courts have been known to disallow gifts where the CWA does not provide all of the required information or is not considered contemporaneous. Make sure you have the statement from the charity before you file the tax return and be sure the statement contains all of the required information.

Non-cash gifts may be subject to special substantiation and appraisal requirements. Be sure you know the requirements before you make the gift.

As always, if you have questions, please get in touch with your Dent Moses advisor.