Substantiation – Donor’s Requirements

Contributions of Less Than $250:
If contribution of money, donor must keep proper records:  (1) canceled check; (2) receipt; or (3) reliable written record (including name of donee, date of contribution, amount of contribution).  Sec. 1.170A-13(a).  If contribution of property, donor must maintain a receipt from donee showing the following information:  (1) name of donee, date and location of contribution, description of property in reasonably sufficient detail (FMV need not be stated).  Sec. 1.170A-13(b)(1).  A receipt is not required if it would be impractical to obtain under the circumstances, such as where the property is deposited at donee’s unattended drop site.  Id.

Contributions of $250 or More:
Donor must maintain a contemporaneous written acknowledgment of the contribution by the donee that includes the following information:  (1) amount of money and description (but not value) of property; (2) whether donee provided any goods or services in consideration, in whole or part, for the contribution (i.e., quid pro quo); (3) description and good faith estimate of the value of any consideration received from donee.  See Sec. 170(f)(8)(B).  In order to be contemporaneous, the acknowledgment must be received by the earlier of:  (1) the date on which the donor files a return for the taxable year in which the contribution was made; or (2) the due date (including extensions) for filing such return.  Sec. 170(f)(8)(C).  A charity that knowingly pre-dates an acknowledgment in order to meet the timing requirement may be exposed to a penalty for aiding and abetting an understatement of tax under Sec. 6701.

Separate payments are generally treated as separate contributions and not aggregated for purpose of determining a contribution’s value.  Sec. 1.170A-13(f)(1).  For contributions made through payroll deductions, the amount withheld from each payment of wages is treated as a separate contribution.  Sec. 1.170A-13(f)(11)(ii).  For such wage withholding contributions, substantiation may be made by:  (1) pay receipt or W-2; and (2) pledge card by donee that states the organization does not provide return consideration for such contributions.  Sec. 1.170A-13(f)(11)(i)(B).

Certain goods or services may be disregarded with respect to determining whether a charity provided any return consideration for a contribution occurring in the context of a fundraising campaign in which the charity informs patrons how much of their payment is a deductible contribution:  (1) goods or services that have insubstantial value (not more than the lesser of (a) 2% of the amount of the contribution or (b) $50 (indexed for inflation)); (2) if the contribution is in an amount of $25 (indexed for inflation) or more, the only benefits received have an aggregate cost within the limits established for a "low-cost article" ($5, indexed for inflation); and (3) free, unordered items distributed to a patron under no obligation to make a contribution with an aggregate cost within the limits established for a low-cost article.  See Sec. 1.170A-13(f)(8)(i)(A); Rev. Proc. 90-12; Rev. Proc. 92-49.  Also, annual membership benefits of $75 or less consisting of rights or privileges that can be exercised frequently during the membership period (e.g., museum admission) or consisting of admission to events open only to members in which the cost per person per event is within the limits established for a low-cost article may be disregarded.  Sec. 1.170A-13(f)(8)(i)(B).

Contributions of More Than $500:
Donor must include with his or her return a description of any contributed property other than readily valued property (e.g., cash, publicly traded securities).  Sec. 170(f)(11)(A) and (B).  For contributions of more than $5,000, the donor must obtain a qualified appraisal.  Sec. 170(f)(11)(C).  For contributions of more than $500,000, the donor must attach a qualified appraisal to his or her return.  Sec. 170(f)(11)(D).  All all similar items of donated property shall be treated as one property regardless of the number of donees receiving such property.  Sec. 170(f)(11)(F).

Contribution of Used Vehicle
In the case of a qualified vehicle (e.g., car, boat, plane) with a value of more than $500, Sec. 170(f)(8) does not apply.  Instead, donor must obtain a contemporaneous written acknowledgment by donee (which includes the VIN) within 30 days of the contribution or a subsequent sale.  Sec. 170(f)(12).  If the donee sells the donated vehicle without significant intervening use or material improvement, the amount of the deduction may not exceed the gross proceeds of the sale, and the acknowledgment must certify the sale was at arm’s length and state the amount of gross proceeds and that the deductible amount may not exceed the gross proceeds amount.  Id.  If the donee does not intend to sell the donated vehicle, the acknowledgment must include a certification of intended use or material improvement and the duration of such use and a certification that the vehicle would not be transferred for consideration before completion of such use or improvement.  Id.