Navigating Charitable Deductions Beyond Cash: The Importance of Appraisals

Dr. Friday Tax Tips
Dr. Friday Tax Tips
Navigating Charitable Deductions Beyond Cash: The Importance of Appraisals
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In this episode, Dr. Friday delves into the complexities of charitable deductions beyond cash contributions. She emphasizes that while donating cash can yield straight tax deductions up to 60% of income, donating items like stock, art, or furniture follows the same principle. However, a critical point arises when donations exceed $2,500, necessitating an official appraisal. Dr. Friday shares a cautionary tale of a gentleman who donated inherited items without an appraisal and faced IRS challenges. This episode highlights the importance of proper documentation in maximizing tax benefits from non-cash charitable donations.

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 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 p.m. right here on 99.7 WTN.