Recently released IRS data paints a picture of contributions of noncash property to charity for tax year 2005. Here are the findings of most interest to church leaders:
- 25.4 million individual taxpayers who itemized deductions reported $48.1 billion in deductions for noncash charitable contributions. Of these taxpayers, 6.6 million reported $41.1 billion in charitable contributions on Form 8283, Noncash Charitable Contributions. This is the form used by individual taxpayers when the amount of taxpayer deductions for all noncash donations on Schedule A, Itemized Deductions, exceeds $500.
- For tax year 2005, tax law changes altered the deduction rules for some charitable contributions. The most significant change was made to the deduction amount allowed for vehicle donations. In previous years, taxpayers could deduct the fair market value of the automobile. Starting in 2005, the deductible amount for most donated vehicles was changed to the lesser of the fair market value or the gross proceeds from the sale of the vehicle by the charity. The effects of this tax law change are reflected in the data. The number of automobile donations decreased a whopping 67 percent from about 901,000 in 2004, to 297,000 in 2005. And, the amount claimed for these donations declined by 81 percent from $2.4 billion in 2004 to $0.5 billion in 2005.
- Corporate stock, followed by clothing and household donations, were the largest categories of noncash donations in terms of total donated amount ($16.3 billion, $7.0 billion, and $3.9 billion, respectively).
- Donations of land, which represented about 7.1 percent of the value of donations deducted, increased by about 64 percent to $2.9 billion, despite the fact that the number of these donations fell 26.1 percent.
- The most noncash donations were given to foundations, large organizations, religious organizations, and educational institutions ($9.8 billion, $8.5 billion, $4.5 billion, and $4.2 billion, respectively).
This article first appeared in Church Finance Today, August 2008.
