The end of the year is close at hand. You only have a few weeks to make a charitable gift to your church or other charity. If you are considering doing so, you need to be aware of a few changes that the IRS has made for 2008. Here are a few tips for you to consider regarding charitable gifts:
Valerie RumboughIndividuals over age 70 may transfer up to $100,000 from an IRA to a qualified charity. This gift qualifies as the IRA required minimum distribution for 2008. There are a few restrictions with this, so contact your CPA for more details.
Clothing and household items may be deducted if they are in “good used” condition. If the value is over $500, a qualified appraisal may be obtained, but it is not required for “good used” condition items. The donor should obtain a receipt with the name of the charity, gift date and description of the property. The donor determines the fair market value of the property and should record how the value was determined.
All gifts of cash now require a bank record (such as a cancelled check or online statement) or a receipt from the charity. Gifts of cash over $250 require a receipt. For payroll deduction gifts, retain a pay stub or a W-2 record to substantiate the gift.
A gift of a car or boat normally is the gross proceeds from sale as reported on IRS Form 1098-C. If the car or other vehicle is used by the charity for its exempt purpose, then you can deduct the fair market value.
For non-cash gifts over $500, you must complete IRS Form 8283, with the property description in Section A. This form should be included along with your federal income tax return (IRS Form 1040). Non-cash gifts (other than public securities) over $5,000 require a qualified appraiser’s determination of the value, and the appraiser and charity must both sign IRS Form 8283.
Finally, in The Worker, Retiree and Employer Recovery Act of 2008 (H.R. 7327), the required minimum distributions for IRAs, 401(k) and 403(b) plans will be waived for year 2009.
When considering non-cash gifts of any kind, remember that you may be able to avoid recognizing capital gain income if you give the item to the charity and let the charity sell it. Remember that all gifts must be completely given on or before Dec. 31, 2008.
Editor’s note: Rumbough, CPA, CFP, is vice president of finance, Baptist Foundation of South Carolina. If you have questions about gifts, call your CPA or the Baptist Foundation at (800) 723-7242.