When you make a charitable contribution, you must keep records to prove the amount of the contributions you make during the year. The kind of records you must keep depends on the amount of your contributions and whether they are:
- Cash contributions,
- Noncash contributions, or
- Out-of-pocket expenses when donating your services.
Cash contributions include payments made by cash, check, electronic funds transfer, online
payment service, debit card, credit card, payroll deduction, or a transfer of a gift card redeemable for cash.
You can't deduct a cash contribution, regardless of the amount, unless you keep one of the following.
- A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution. Bank records may include:
- A canceled check.
- A bank or credit union statement.
- A credit card statement.
- An electronic fund transfer receipt.
- A scanned image of both sides of a canceled check obtained from a bank or credit union website
- A receipt (or a letter or other written communication such as an email) from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
- A payroll deduction record.
There are additional record requirements depending on the amount of the contribution - IRS Publication 526 discusses the additional documentation required based on the dollar amount of the cash donation. You can see these requirements beginning on page 20 of the publication, found at this link: IRS Publication 526
If you purchase an item at a charity auction, you may be able to claim a charitable contribution deduction - however, your charitable contribution is only the amount of the purchase price paid for an item over its fair market value. You must be able to show that you knew that the value of the item was less than the amount paid. For example, a charity may publish a catalog, given to each person who attends an auction, providing a good faith estimate of items that will be available for bidding. As an example, if a charity is auctioning off an item that has a value of $50 and you paid $70 for it, you would have a $20 charitable contribution. But, if you pay less than the value of the item, then there is no charitable contribution deduction.
For more information on charitable contributions, see IRS Publication 526 at the link provided above.
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