Posted on November 30, 2005 at 16:51:52:
We get charity appeals and donate all year, yet there’s always a year-end push to get contributions made in time to qualify for a deduction on this year’s taxes.
To that end, be sure that checks go out early enough to be cashed and posted this year. Credit-card donations are deductible when charged, even if not yet paid for. For smaller donations a canceled check or credit card receipt is adequate proof, but for gifts over $250, you’ll need an acknowledgement from the charity on hand before you deduct it on your return. Gifts over $5,000 (except publicly traded securities) must be backed by a “qualified written appraisal.” If you get a gift or premium in exchange, its value will reduce the deductible amount.
Gifts of appreciated securities can be a win-win opportunity: the charity gets a nice contribution; you get a sizable deduction and never have to pay taxes on the capital gain.