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Substantiating Noncash Contributions

Requirements churches and donors must know and follow.

Substantiating Noncash Contributions

In a recent issue of Church Law & Tax Report, Richard Hammar detailed a case in which the United States Tax Court disallowed a married couple's $37,315 charitable contribution deduction. The couple claimed to have donated books, clothes, toys, furniture, and other items to a church and three other charitable organizations. At issue was the couple's inability to meet specific substantiation requirements for noncash contributions. The case serves as both a warning and a reminder that churches and donors must know and follow these requirements.

Requirements for a proper and timely acknowledgement

Federal tax law requires that for any contribution valued at $250 or more, the donor must obtain a proper acknowledgment. Here are the requirements for the acknowledgment:

  • Legal name of donee organization.
  • Name of donor (no other identifying information about the donor is required, such as address and especially not the donor's Social Security number).

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Michael (Mike) E. Batts is a CPA and the managing partner of Batts Morrison Wales & Lee, P.A., an accounting firm dedicated exclusively to serving nonprofit organizations across the United States.

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