Donating property? Keep good records — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Donating property? Keep good records

Get PDF file

by on
in Small Business Tax,Small Business Tax Deduction Strategies

This point can’t be emphasized enough: You must keep the detailed records required by the tax law to back up claims for charitable donations of property.

Alert: A taxpayer in a new Tax Court case failed to properly substantiate charitable gifts. (Kunkel, TC Memo 2015-71, 4/8/15) As a result, a claimed deduction of more than $37,000 was reduced to an allowable deduction of zero!

To make matters worse, the Tax Court imposed a 20% penalty on the taxpayer for intentionally disregarding the rules.

Here’s the whole story: The tax law imposes strict substantiation requirements on charitable gifts of property, even relatively modest ones. Generally, the exact record-keeping required depends on the claimed value. In any event, no deduction is allowed if the property isn’t in good condition.

For donations of gifts valued at less than $250, you must obtain a receipt from the organization, unless it’s impractical to do so, like when you...(register to read more)

To read the rest of this article you must first register with your email address.

Email Address:

Leave a Comment

 

Previous post:

Next post: