Noncash charitable contributions are a good deduction if taken correctly. Here are 3 Rules to keep in mind.
- Rule No. 1. The donation must be made to a qualified charity (no, your needy college kids do not count).
- Rule No. 2. No deduction is allowed for a charitable contribution of clothing or household items unless the clothing or household item is in good used condition or better. In other words, you can’t take unusable items that belong in the landfill and deduct them as a donation. The IRS is authorized by regulation to deny a deduction for any contribution of clothing or a household item that has minimal monetary value, such as used socks and undergarments.
- Rule No. 3. You must get a receipt to document your donation. In addition to the receipt, my wife regularly lists each of the donated items on a separate sheet of paper along with the following information.
- Name and address of charity.
- Date items were donated to the charity.
- Description of each item donated.
- Fair market value of each item at the time they were donated.