Donations & Letters

To write a donation letter for non-cash items donated to your location please follow the directions below.

  1. Donation letter must be on company letter head (Sample letter has been provided)
  2. It must contain our tax id number
  3. The donors full name and address must appear on the letter
  4. The date of the donation
  5. The sentence stating no goods or services were received in exchange of  the donation other than tangible religious benefit
  6. The body of the letter must contain that the items being used are furthering our tax exempt purpose
  7. An explanation what the items are being used for
  8. If selling the items an explanation the items will be sold and what we plan to do with the funds.
  9. The fair market value of the item (The 5 year streamlined method asset calculator can be found here) or you can use IRS Publication 561. The salvation army has a great guide book on fair market value of house goods. Please note that the organization must use the same method for all non-cash donations or a combination thereof.
  10. Boats, Vehicles, Motor Cycles, Airplanes, Art and Antiques have a special set of rules Please refer to IRS publication 526 and the charity’s guide to car donations.
  11. All records must be kept for 7 Years by CTK so please put them in a safe place on site.

Donations over 500.00 but less than 5,000.00 need to be accompanied by a receipt, bank statement, cancelled check, or credit card statement as proof of purchase.

Appraisals are required when the following occurs. You can also find out more about appraisals in IRS Publication 561.

  • A single donated item or a group of similar items is more than $5,000.
  • Stock not traded publicly is $10,000 or more. Publicly traded securities don’t require a written appraisal.

You’re also required to get an appraisal for an item of clothing or a household item if either of these is true:

  • The item is valued at more than $500 .
  • It isn’t in good condition.

To evaluate the specific kind of donated property, the qualified appraiser must possess the needed:

  • Education
  • Credentials
  • Experience

1098-C will need to filed with the IRS for a donation of any vehicle, motor cycle, airplane, or boat over 500.00. Copy A will need to be sent to the IRS, copy B & C need to go to the donor and copy D is for our records. This will need to be done within 30 days of the donation of the vehicle depending on the box they check on form 1098-C. Please see the form for instruction.

IRS form 8283 will need to be presented by us to the donor for items over 500.00, you can find the instructions for the form here. Please follow the instructions as to how the form needs to be filled our and when it needs to be sent to the IRS.

IRS Form 8282 will need to filled out and sent to the IRS for donated property over 5,000.00 that is sold or disposed of  within 3 years of acquiring it. Please follow the instructions as to how the form needs to be filled our and when it needs to be sent to the IRS.

Please keep in mind that both federal and states laws apply to charitable donations. You will need to visit both the Secretary of State and Department of Revenue’s website for rules on your states laws. You can get the website information for your particular state by using the Google search option and typing for example; California Department of Revenue.

You can also review a brief summary explanation of non-cash donations provided by H&R block.

 

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