When it comes to charitable deductions, cash donations up to 60% of your income are straightforward. However, for non-cash donations like stocks, art, or furniture valued over $2,500, an appraisal is crucial. Dr. Friday shares a cautionary tale of a client who donated inherited items without a proper appraisal, leading the IRS to deny the deduction despite photographic evidence. Ensuring you have the right documentation, including a qualified appraisal for high-value non-cash donations, can save you significant tax dollars.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.
Charitable deductions. We usually talk about charitable deductions and most of the time we’re talking cash, right? If you give cash up to 60% of your income, it’s a straight tax deduction. But how about if you give stock, precious art, furniture, all of that. That is also, but here’s the catch. If you’re giving more than $2,500, then you need to have an appraisal. Had a gentleman that inherited some things and he gave it to donation and the IRS came back and said, wait, you didn’t have an appraisal, so we’re not giving. He had pictures, he had documents, he did not have a direct appraisal. So making sure you have the right documentation can save you tax dollars.
You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.