Donations to tax-exempt organizations: Acknowledgements and Deductibility
Generally, all donations require a written receipt from the tax-exempt organization acknowledging the donation, and for donations larger than $250, you must keep written records about the items donated. Any donation over $5,000 should be independently appraised prior to donating to a tax-exempt organization. A thank you letter acknowledging a cash donation should provide the following information:
- The amount of the gift,
- The date the gift was received,
- What, if any, any goods or services were provided in return for the donation
Sample acknowledgement:
Newton Council of Parent-Teacher Organizations Inc. (Taxpayer ID#20-1320742) gratefully acknowledges receipt of your donation, as detailed below. The [various programs and activities supported by] or [specific program that was supported] the Newton Council of PTOs would not be possible without such generous support.
Newton Council of PTO’s is registered as a tax-exempt organization under section 501(c)(3) of the federal tax code. Thus, in accordance with federal tax regulations, contributions of cash or donations of property are deductible in accordance with IRS regulations.
| Receipt Date: |
9/17/2004 |
| Amount of contribution: |
$250.00 |
| Designation: |
$100 to general operating, and $150 to Technology |
| No goods or services were provided in exchange for this donation. | |
For gifts of porperty, the IRS holds the donor responsible for estimating the value of his or her donation.
For Noncash contributions, the IRS requires a donor to retain specific records of the noncash donation, with specific requirements for donations at these breakpoints:
- less than $250
- at least $250 but not more than $500
- over $500 but not more than $5,000
- over $5,000
Information for Donors about deducting the value of contributions to a tax-exempt organization:
The IRS website provides a number of publications about Federal income tax deductibility for contributions to a tax-exempt organization such as a PTO:
- Your Federal Income Tax for Individuals – Publication 17, Section 26 – Contributions ( http://www.irs.gov/publications/p17/ch26.html). Information on charitable contributions within the IRS’s annual guide for individuals.
- Publication 526 (12/2003), Charitable Contributions ( http://www.irs.gov/publications/p526/index.html). Information on how to claim a deduction for charitable contributions.
- For guidance on property donations Publication 561 (2/2000), Determining the Value of Donated Property (http://www.irs.gov/publications/p561/index.html)