Tips on Tax Deductions for Charitable Contributions (V)

General Tips on Deducting Contributions

1. Contributions are deductible for the year in which they are actually
paid or delivered. Pledges are not deductible until the year in which
they are paid.

2. The value of volunteer time or services to a charitable organization
is not deductible. However, out-of-pocket expenses directly related to
voluntary service are usually deductible.

3. Contributions for which the donor receives a gift or other kinds of
benefits are deductible only to the extent that the donation exceeds the
value of any benefit received by the donor. (See "When Goods and Services
are Involved...")

4. Direct contributions to needy individuals are not deductible.
Contributions must be made to qualified organizations in order to be tax
deductible.

5. Contributions made directly to foreign organizations are not
deductible, except in the case of some Canadian organizations as
specified in an agreement with that country. Also, donations to charities
located in Puerto Rico, the Virgin Islands, and other U.S. possessions
are deductible. Such organizations must meet the requirements for
exemption under the income tax laws of the United States.

6. The "fair market value" of goods donated to a thrift store is
deductible as long as the store is operated by a charity. To determine
fair market value, visit a thrift store and check the "going rate" for
comparable items. One cannot take a deduction if the goods are sold on a
consignment basis whereby the original owner gets a percentage of the
final sales price.

7. Donated property may generally be deducted at the fair market value of
the property at the time of the contribution. In certain situations,
additional details concerning the property's worth may need to be filed
with the IRS in order to make a deduction on your federal income tax
forms. Also, gifts of appreciated property are subject to special rules.
See a financial advisor for additional details.

8. PAS advises donors to seek professional advice or to consult the IRS
when in doubt about the deductibility of contributions. The following IRS
pamphlets, available through local IRS offices, also provide useful
information.

Pub. 448: "Federal Estate and Gift Taxes"
Pub. 526: "Charitable Deductions"
Pub. 529: "Miscellaneous Deductions" (e.g., political contributions,
labor union dues as an employee expense)
Pub. 535: "Business Expenses and Operating Losses"
Pub. 557: "Tax-Exempt Status for Your Organization"
Pub. 561: "Determining the Value of Donated Property"
Pub. 585: "Voluntary Tax Methods to Help Finance Political Campaigns"