Sharing your wealth with a preferred charity can reduce your taxable estate and ease your income tax liability. But, unless you meet IRS substantiation requirements, the Service could deny the corresponding deductions you’re claiming. Let’s look at the requirements for different asset types.
Generally, you can substantiate gifts of less than $250 with a canceled check, written receipt, or other reliable record (such as a credit card statement) that indicates the name of the charity and the amount and date of your gift.
If you donate more than $75 in exchange for goods or services other than intangible religious benefits (such as admission to religious ceremonies), the charity must provide you with a statement that:
- advises you that your deduction is limited to the amount by which your gift exceeds the value of those goods and services; and
- provides a good-faith estimate of that value.