As preparation for winter holidays begin earlier and earlier, the Council wants to provide an important resource for your year-end fundraising and grantmaking activities. The IRS provides a wealth of resources on charitable contribution deductions. While I’d enjoy writing details about each of them, I will spare you, and send you to the IRS directly.
We all have a story about a donor making a last minute gift. Here is some information to remember when making a tax deductible donation. A donor can deduct your contributions only in the year you actually make them in cash or other property (or in a later carryover year). This applies whether you use the cash or an accrual method of accounting. Usually, a donor makes a contribution at the time of its unconditional delivery.
Here are some examples to help your team think about this issue:
- Check. A check you mail to a charity is considered delivered on the date you mail it.
- Text message. Contributions made by text message are deductible in the year you send the text message if the contribution is charged to your telephone or wireless account.
- Credit card, including online. Contributions charged on your bank credit card are deductible in the year you make the charge.
- Paybyphone account. Contributions made through a paybyphone account are considered delivered on the date the financial institution pays the amount. This date should be shown on the statement the financial institution sends you.
- Stock certificate. A properly endorsed stock certificate is considered delivered on the date of mailing or other delivery to the charity or to the charity's agent. However, if you give a stock certificate to your agent or to the issuing corporation for transfer to the name of the charity, your contribution isn't delivered until the date the stock is transferred on the books of the corporation.
- Promissory note. If you issue and deliver a promissory note to a charity as a contribution, it isn't a contribution until you make the note payments. Option. If you grant a charity an option to buy real property at a bargain price, it isn't a contribution until the charity exercises the option. Borrowed funds. If you contribute borrowed funds, you can deduct the contribution in the year you deliver the funds to the charity, regardless of when you repay the loan.
Quick Tips for Finding Gift Information:
- Publication 526 Guide to Charitable Contributions, https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions
- Publication 561 Determining the Value of Donated Property, https://www.irs.gov/pub/irs-pdf/p561.pdf
- Publication 1771 Charitable Contributions Substantiation and Disclosure Requirements, https://www.irs.gov/pub/irs-pdf/p1771.pdf
- Types of Charitable Organizations and Corresponding Deductibility Limitation, https://www.irs.gov/charities-non-profits/exempt-organizations-select-check-deductibility-status-codes