We all know that it is better to give than to receive - RIGHT? While this remains true, there have been some recent tax law changes that make it little tricky to receive that tax deduction on what you've given away last year.

More than $5,000

If you have something to give away to charity that, in your mind, is clearly valued at over $5,000 - be careful. Taxpayers must prove this with a "qualified appraisal". It has been our experience that this can be tricky, indeed. One must first find a "qualified appraiser". Also, the appraisal must be done (appraisal received) by the due date (including extensions) of your tax return but no earlier than 60 days prior to the donation of said property. There are penalties awaiting offenders; if you are considering declaring a charitable donation of property that you value at over $5,000, please call us first. We can help steer you in the right direction.

Vehicle Donations

There are also strict rules which apply to the donation of car, boat or plane if they're valued at over $500. You will need a written acknowledgement from the charity within thirty days after the donated vehicle is either sold, overhauled or improved, or given to a needy person as part the charity's mission. Donors of vehicles valued at more than $500 should fill out Form 1098-C which must accompany tax returns with this claim.

More than $250

The good news is that there are no new tax laws affecting donations of cash or property over $250 in value. The bad news is that such donations require a little more effort to substantiate. What will work: written acknowledgement from the establishment to which the donation was given. This document must clearly describe the donation or list the amount of money donated. It also must state that the donor did not receive any goods or services for the cash or property donated. And, cancelled checks will not work here. Finally, the acknowledgement should be received no later than the due date (or extended due date, if this applies) of the tax return for the year that the contribution was made.

Less than $250

Even cash contributions of less than $250 are being scrutinized. Taxpayers used to be asked to keep a record of things like dropping $20 into the Salvation Army bowl over the holidays; now cash contributions of less than $250 need something more like a bank record, cancelled check, wire transfer acknowledgement or credit card record. You may want to keep this in mind next mind you make a donation to your favorite charity. Writing a check instead of dropping a bill in the kitty might just be the way to go from now on.

Contributions of Used Clothing & Household Items

Many people donate used clothing or household items to charities. Please note that these items must be deemed in either "good condition or better" unless the items are valued at more than $500 (in which case you will also need an appraisal as we mentioned earlier). Not that the IRS has clearly defined the term "good condition or better". To protect yourself, make sure you use that term good condition somewhere. And you may want to not use those unattended drop-off sites that you see in front of the supermarkets; might be hard to prove such a donation.

Please keep giving! And do feel free to call us if you have any questions about the deductions you intend to make when filing your income tax. You can always e-mail us at info@marg.com.