In the quiet months before the conventional season of festivities and gift exchanges begins, you might not be thinking about charitable contributions. Yet if giving is part of your 2013 tax planning strategy, starting now is smart, especially if you intend to donate noncash assets. Why? Depending on the assets and their value, title transfer and appraisals can be required.
For example, say you donate appreciated stock you hold in street name with your broker. Unlike writing a check, which means the donation is delivered on the day you mail it, a gift of stock is not complete - or deductible - until ownership is transferred to the charity.
Other special rules apply to noncash donations. Here's one you may be familiar with: Clothing or household goods must be in "good used condition" or better to claim a federal income tax deduction.
And one that's probably less familiar: Guidelines for donations of cars, boats, and airplanes require you to obtain Form 1098-C from the charity when the amount you're deducting for these items is greater than $500.
What about appraisals? You'll need a qualified appraisal for real estate and other property for which you intend to claim a deduction of more than $5,000. Generally, the appraisal must be completed prior to the due date of your tax return.
Donations of art, jewelry, inventory, conservation easements, and other noncash assets offer tax benefits that make following the rules worthwhile. Give us a call. We'll help you get everything in place before year-end.