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Wilmington CPA discusses Form 8283 as support for Schedule A | Charitable Giving

Wilmington NC CPA Form 8283

Gary Bode, CPA: if I think a gift will raise an audit red flag, I provide supplemental documentation and exceed IRS requirements. For a free phone consult, call 399-2705.

The most common use of Form 8283, Noncash Charitable Contributions, merely supports Line 17 , in the Gifts To Charity Section of Schedule A. I think most Wilmington CPAs have seen an increase of gifts, like household items and clothing, to places like Goodwill. Why? The idea of recycling, combined with a charitable incentive, is a strong motivator. Of course, there’s always that tax receipt at the front desk that you basically fill in yourself. So, the IRS probably sees abuse by folks who exaggerate their generosity. In fact, multiple areas of charitable giving became IRS hot issues in the last few years.

The IRS now requires substantiation, via Form 8283 of these Goodwill gifts, if the claimed amount exceeds $500 for the tax year. That limit is easy to cross if you’re moving, do an extensive Spring cleaning, have fast growing children, etc.

Wilmington CPA’s Suggestions for Clothing and Household Goods Donations

  • Always get a signed, dated receipt.
  • Fill out the receipt in detail when contributed, e.g. 7 men’s dress shirts, 1 boom box, and 1 recliner. Having the clerk do it is even better.
  • Mark the receipt “all in good condition.”
  • Attach a value per item. I try to imagine presenting this to an auditor. There has to be some method shown for determination of value.
  • The value per item, for the charitable deduction, is what Goodwill typically sells it for. So, a man’s dress shirt might be $4.
  • If the annual amount donated is greater than $500 prepare Form 8283 and attach it to your return.

Other issues on Form 8283

As the value of a non cash donation increases, the more IRS scrutiny it receives. An appraisal is required for any gift over $5000. In some cases, the donee has to sign Form 8283. Conservation easement donations now require extensive documentation.

I’m a Wilmington NC CPA who believes in nailing down noncash gifts to help prevent an audit. If I feel some gift will raise a red flag, I’ll exceed IRS compliance and provide supplemental information. For a free phone consult, please call (910) 399-2705.

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