Posted by Masterpiece Accounting Services LLC

Charitable Contribution Rules

Charitable Contribution Rules

Charitable Contributions Rules

When it comes to Charitable Donations it is important to remember that these donations have to be made to qualified organizations. In addition, donations are not deductible if they are made to individuals.  When donating cash for more than $250.00 the qualified organization needs to provide you with a written communication specifying the date and the amount of the contribution as well as the name of the organization. The communication must also include whether the organization provided any goods or services in exchange for the gift.  If this is the case, then a description of those goods or services and an estimate price must also be stated in the letter.

According to the Internal Revenue Service, https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions, Qualified Organizations are the following:

  1. A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
  2. A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
  3. A church, synagogue, or other religious organization;
  4. A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
  5. A nonprofit volunteer fire company;
  6. A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
  7. A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
  8. A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.
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