For charitable donations made in tax years beginning after December 31, 2017 and before January 1, 2026, the 50% limitation for cash contributions to public charities and certain private foundations is increased to 60%. Contributions in excess of 60% limitation are carried forward and deducted for up to five years, subject to the future year’s ceiling.
No deduction is allowed for charitable donations of $250 or more unless the donation is substantiated by a contemporaneous written acknowledgment from the donee.
You may deduct a charitable donation made to the following organizations qualified under section 170(c) of the Internal Revenue Code:
1- A state or US possession (or political subdivision thereof), or the US or the District of Columbia, if made exclusively for public purposes;
2- A community chest, corporation, trust, fund, or foundation, organized or created in the US or its possessions, or under the laws of US, any state, the District of Columbia or any possession of US, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
3- A church, synagogue, or other religious organization;
4- A war veterans’ organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
5- A nonprofit volunteer fire company;
6- A civil defense organization created under federal, state, or local law;
7- A domestic fraternity, operating under the lodge system, if the donation is used exclusively for charitable purposes;
8- A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.
Timing of Contributions
Contributions must actually be paid in cash or other property before the close of your tax year to be deductible, whether you use the cash or accrual method.
If you donate property other than cash to a qualified organization, you generally deduct the fair market value of the property. If the property has appreciated in value, however, some adjustments may have to be made. The rules relating to how to determine fair market value are discussed in Publication 56, Determining the Value of Donated Property. Under certain circumstances taxpayers must use their basis of the property.
Zaher Fallahi, Tax Attorney, CPA, is a Tax Controversy Attorney, and defends taxpayers in resolving their Income Tax and Offshore Accounts (FBAR and FATCA) problems. Telephones: (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County),Toll Free 877-687-7558, e-mail firstname.lastname@example.org