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Donations to qualifying tax-exempt charities are tax-deductible. Such donations also include non-cash donations. However, unlike cash donations, it is at times, difficult to determine the value of various items donated to charities. Therefore, the IRS has placed specific rules that govern non-cash donations for tax deduction eligibility. General Rules for Non-Cash Items In general, for all non-cash items whose value exceeds $250.00, one needs to receive a record from the charity, acknowledging the donation with the description of the item being donated and its value. This record will support the tax deduction in your tax returns. For single non-cash items that exceed $500.00, one needs to fill out Form 8283 (Non-cash Charitable Contributions Form) with the details of the donation and attach the form to his or her tax returns. For a non-cash item donation that exceeds $5,000.00, you will need to fill out the "B" section of the same form (Form 8283). Besides this, you will need to get an appraisal by a qualified appraiser for the item. This also applies for similar goods with a value of over $5,000.00 - for example, donating 20 used computers with a total value of $10,000.00. There are specific rules that apply to different types of non-cash items. These are discussed below: Clothes and Household Items - Clothes and household items need to be in good and usable condition to qualify for a tax deduction. The price of the donated items is determined by the price that the items would have fetched in a used clothes and items store. Clothes and household items valued over $500.00 need an official valuation. Art, Ornaments, and Memorabilia - Making donations of collectibles and jewelry is more complex, as the value of such items is more subjective. For donations over $500.00, you will need to justify the price in one of three ways: A price-list that list a similar product Evidence of a recent sale of similar item- for example on an online auction website A valuation from a professional appraiser. If a single donated item in this category is valued over $20,000.00, you will need to include a picture of the item as you attach the Form 8283. Planes, Boats, and Cars - For donations of planes, cars, and boats, the qualifying charity receiving the item is required to provide the person donating with a Form 1098-C that indicates the value of car and date that it was given. This is the documentation you will use for your tax deduction. Stocks and Mutual Funds - Donating stocks and mutual funds is more straight-forward, as these items are more or less like cash. The value amount to use for the stocks and mutual fund donated is the value of these assets on the day that they were donated. You can use an average of the highest and lowest price of an asset on the day of donation for the more volatile assets. Travel Mileage - If your donation was in the form of charity work, you get no deduction for the value of the work done. However, if you traveled for the purpose of the charity work, you can claim charity mileage deduction. For the tax year 2011, the tax deduction for charity mileage is 14 cents per mile. You can also include parking fees and any toll charges to the amount to deduct. Donations are only tax deductible for taxpayers who itemize their tax deductions. Therefore, you will need to check whether deducting the donation through itemizing provides a larger tax savings that taking the standard deduction. Rob L Daniel and partners of Limon Whitaker & Morgan, for years have helped businesses and individuals Nationwide, with their delinquent IRS & State tax problems. The firm is based in Los Angeles, California USA. [http://www.limonwhitaker.com] Tel:888.321.6188 You have permission to republish and use this article in your newsletter, website, or blog as long as you leave the article fully intact, and include this resource box at the end of the article. Article Source: http://EzineArticles.com/expert/Rob_L_Daniel/190679 Article Source: http://EzineArticles.com/6536948

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