9061 / What verification is required to substantiate a deduction for a charitable donation?

A charitable deduction is not allowed for any contribution of a check, cash, or other monetary gift unless the donor retains a bank record or a written communication from the charity showing the name of the charity and the date and the amount of the contribution.²

A taxpayer who donates cash or property to charity that has a value of $250 or more must obtain substantiation in the form of a contemporaneous written acknowledgment of the contribution that is supplied by the charitable organization.³ This acknowledgment must include the following information: (1) the amount of cash contributed and a description (excluding value) of any property contributed, (2) a statement of whether the charitable organization provided any goods or services in consideration for the contribution, and (3) a description and good faith estimate of the value of any such goods or services, or (4) a statement to the effect that the goods or services provided consisted solely of intangible religious benefits.⁴ The acknowledgment will be considered “contemporaneous” if it is obtained by the taxpayer on or before the earlier of (1) the date the taxpayer files his return for the year, or (2) the due date (including extensions) for filing the return.⁵

Prior to 2018, substantiation was not required if the information was reported on a return filed by the charitable organization.⁶ This exception was eliminated by the 2017 tax reform legislation. An organization could provide the acknowledgement electronically, such as via an e-mail addressed to the donor.⁷

For contributions of property other than money, the taxpayer is generally required to maintain a receipt from the donee organization showing the name of the donee, the date and location of the contribution, and a description of the property. The value does not have to be stated on the receipt.⁸

If a taxpayer donates property with a value that exceeds $500, the taxpayer must satisfy certain appraisal requirements in addition to the property description requirements outlined below.⁹ The appraisal requirements that generally apply to property valued at more than $5,000 and at more than $500,000 do not apply to readily valued property, such as cash, publicly traded securities and certain qualified vehicles for which an acknowledgement is provided. Further, the general appraisal requirement does not apply if the taxpayer can show that the failure was due to reasonable cause and not willful neglect.¹⁰ For purposes of the valuation thresholds, property (and all similar items of property) donated to one charity will be treated as one property.¹¹

If the claimed value of the donated property exceeds $500, the taxpayer must include with the tax return a description of the property.¹² Specifically, the taxpayer must attach a completed Form 8283 to the relevant tax return (Noncash Charitable Contributions), which includes a property description and an acknowledgment by the organization of the amount and value of the gift. (The property description requirement does not apply to a C corporation that is not a personal service corporation or a closely-held C corporation.) In addition, a qualified appraisal must be obtained when the claimed value of the property exceeds $5,000 or $500,000.¹³ See Q 9062 for a detailed discussion of the appraisal requirements that must be satisfied for certain charitable donations.

Under the special rule for pass-through entities (partnerships or S corporations), the above requirements will be applied at the entity level; however, the deduction will be denied at the partner or shareholder level.¹⁴