Documenting Charitable Deductions

Editor:
Albert B. Ellentuck, Esq.
Of Counsel
King & Nordlinger, L.L.P.
Arlington, VA

Editors note: This case study has been adapted from Tax Planning for High Income Individuals, 4th Edition, by Anthony J. DeChellis, Douglas L. Weinbrenner, Catherine A. Roeder and Patrick L. Young, published by Practitioners Publishing Company, Ft. Worth, TX, 2003 ((800) 323-8724; www.ppcnet.com).

Facts: It is tax season once again for Nick Jones, a CPA tax preparer. Lately, clients have been calling to ask the kind of documentation they will need to verify deductions claimed for donations of stock, art and real estate. Issues: Nick thinks that it would be valuable to send a chart to clients, so that, in the future, they will know in advance of a donation the kind of documentation required.

Analysis

Exhibit 1 contains a chart describing the types of documentation required to substantiate various types of charitable contributions from individual taxpayers. Failing to maintain the proper documentation generally results in the donation being nondeductible.