Non cash charitable donations

[maningasma]

form 8283, and confusion on the $500-$5,000 deduction

[Mike9241]

please read the instructions to the form. if you are still confused post back in this thread with more specific info about what you are confused about.

https://www.irs.gov/pub/irs-pdf/i8283.pdf 

[Opus 17]

If you have more than $500 in non-cash donations, you must include this form.  Turbotax will do it automatically if you list the donations in the program, and the form can be e-filed with your return.

If you have more than $5000 in non-cash donations of "a single item or a group of similar items" you must include the form. You must also have a paper copy of the form signed by a qualified appraiser to attest the value of the donation, and it must be signed by a qualified financial official of the charity, and you mail the signed original paper copy after e-filing the rest of the return. 

[maningasma]

Thank for the guidance.  IRS states, “You must file one or more Forms 8283 if the amount of your deduction for each noncash contribution is more than $500. You must also file Form 8283 if you have a group of similar items for which a total deduction of over $500 is claimed.”  

Example: I make five donation runs in one year for clothes and household items.  Each donation run is $500 or less of clothes/house goods.  On 8283 form part 1 section A notes, it states “If the amount you claimed as a deduction for an item is $500 or less, you do not have to complete columns e, f and g.”  I’m probably overthinking this, but it’s not crystal clear to me.  Is the $500 the total amount for the year, or is is it per donation event?  That whole “…for each non cash contribution” statement is confusing me.  Am I required to fill in sections e, f, and g based on that scenario, and do I provide info for e, f, and g for each line item deduction?  Thanks in advance.

[maningasma]

Also need to note that yes TTax has populated form 8283 for my non cash charitable donations.  However, it has never prompted me to fill in columns e, f, and g even though the collective donations for the year exceed $500.

[Opus 17]

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@maningasma wrote:

Thank for the guidance.  IRS states, “You must file one or more Forms 8283 if the amount of your deduction for each noncash contribution is more than $500. You must also file Form 8283 if you have a group of similar items for which a total deduction of over $500 is claimed.”  

Example: I make five donation runs in one year for clothes and household items.  Each donation run is $500 or less of clothes/house goods.  On 8283 form part 1 section A notes, it states “If the amount you claimed as a deduction for an item is $500 or less, you do not have to complete columns e, f and g.”  I’m probably overthinking this, but it’s not crystal clear to me.  Is the $500 the total amount for the year, or is is it per donation event?  That whole “…for each non cash contribution” statement is confusing me.  Am I required to fill in sections e, f, and g based on that scenario, and do I provide info for e, f, and g for each line item deduction?  Thanks in advance.

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If you make 6 trips to Goodwill, each $100, that would be listed 6 separate times (6 different lines) with each specific date.  That much I am certain of.

I can't definitively answer your second question without checking my own prior tax returns, but I believe the interpretation is that if an individual day's donation is under $500, you don't have to fill in e, f and g, even though you have 6 small donations that together add up to more than $500.  This is based mainly on the fact that Turbotax has to be tested and approved by the IRS and would not be allowed to e-file if it submitted non-conforming tax returns.  (You could test it by putting all your donations under one date, I suppose.)

I've claimed in excess of $500 in several previous years and never had a problem with the IRS with whatever Turbotax filled out for me. 

[maningasma]

Thank you Opus17, that was my interpretation as well and have been doing it for years.  We were audited 5 years ago and the agent did ask about how we procured the goods for our donations.  We told her that we bought everything but didn’t  have receipts to prove it or prove that we owned it for at least 12 months.  She didn’t pursue it and may have extended some grace along with the fact it would have been more effort on the IRS than it was worth.  We walked away with no change for our 2015-2017 returns (very thankful).  Ever since then, we make sure our donation runs stay under $500 and take pictures of everything.  I wonder how many others agree/disagree with our opinion.

[Opus 17]

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@maningasma wrote:

Thank you Opus17, that was my interpretation as well and have been doing it for years.  We were audited 5 years ago and the agent did ask about how we procured the goods for our donations.  We told her that we bought everything but didn’t  have receipts to prove it or prove that we owned it for at least 12 months.  She didn’t pursue it and may have extended some grace along with the fact it would have been more effort on the IRS than it was worth.  We walked away with no change for our 2015-2017 returns (very thankful).  Ever since then, we make sure our donation runs stay under $500 and take pictures of everything.  I wonder how many others agree/disagree with our opinion.

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Making individual runs under $500 doesn't change the requirements if the total is more than $500.

What you need is your own written inventory that lists the purchase date, purchase price, donation date, claimed value, and a description of the item with enough detail to determine the value.  For purchase date and price, you can use your best guess, and you will rarely need receipts or other proof except in the case of unusual or special items.  As long as your list of donated items is written down close to the time of the donation, while your memory is freshest, you should rarely encounter problems.

If you think you are likely to go over $5000, though, I would be more cautious.  If you claim a total of 20 donations to Goodwill of $495 each ($9900), you could be reasonably asked if what you really did was make a single large donation that you split up to avoid the requirement of an appraisal, and whether "used household items and clothing" is really one group of "similar items" over $5000.