Gift Giving Tips from the IRS

The IRS recently issued several tips on tax law provisions that may affect year-end gift giving. A few of the gift-giving tips issued are below:

• IRA owners who are over 70 ½ years old can transfer up to $100,000 per year directly to an eligible charity. The amount transferred is not taxable and no deduction is available as long as the IRA trustee contributes the funds to an eligible charity directly. For more information on donating from an IRA, see Publication 590.
• If a taxpayer claims a deduction of more than $500 on donated household items or clothing, the donated items must be in good used condition or better in order to be deductible.
• Taxpayers looking to deduct a charitable donation of money, regardless of the amount, must either have a bank record of the donation or a written communication from the charity indicating the amount donated, the charity’s name, and the date of the donation.
• Taxpayers may deduct contributions in the year the contributions were made.
• Only individual taxpayers who itemize their deductions on Form 1040 may claim deductions for charitable contributions.

For more tips from gift-giving tips from the IRS, see Michael S. Fischer, Year-End Giving Tips, Compliments of the IRS, Dec 19, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.