A taxpayer may deduct contributions made to a qualified charitable organization. Only contributions to eligible organizations qualify; gifts to individuals or nonqualified groups do not.
Qualified organizations include:
- Religious organizations
- Nonprofit charitable organizations
- Nonprofit educational organizations
- Nonprofit hospitals and medical research groups
- Emergency energy assistance programs operated through a utility
- Volunteer fire companies
- Public parks and recreation facilities
- Civil defense organizations
Nondeductible Contributions
A taxpayer cannot deduct:
- Value of services provided to an organization
- Partial‑interest gifts, such as the right to use property
- Contributions to specific individuals
- Payments to clergy for personal use
- Payments made on behalf of someone else performing services
- Payments for a specific patient’s care
- Contributions to nonqualified organizations, including:
- For‑profit groups
- Certain bar associations
- Chambers of commerce
- Civic leagues
- Social clubs
- Foreign organizations (with limited exceptions)
- HOAs
- Labor unions
- Political organizations or candidates
Contributions of Property
Capital Gain Property
Deduction is generally FMV at the time of the gift.
Ordinary Income Property
Deduction is FMV minus ordinary income or short‑term gain that would have been recognized if sold. This usually limits the deduction to basis.
Property That Decreases in Value
Deduction is limited to FMV, not original cost.
Clothing and Household Items
Must be in good used condition or better unless:
- Deduction exceeds $500, and
- A qualified appraisal is attached
Appraisal Requirements
- Form 8283 required for non‑cash gifts over $500
- Appraisal required for items or related groups valued over $5,000
Vehicle Donations
Deduction limited to:
- FMV on date of contribution, or
- Gross proceeds from later sale
Requires contemporaneous written acknowledgment (often Form 1098‑C).
Limits on Charitable Deductions
The deduction is limited to a percentage of AGI, depending on:
- Type of property
- Type of organization
General Limits
- 60% of AGI for cash contributions to 50% limit organizations
- 50% of AGI for non‑cash contributions to 50% limit organizations
- 30% of AGI for:
- Gifts to organizations other than 50% limit groups
- Cash contributions for the use of an organization
- 20% of AGI for non‑cash capital gain property given to non‑50% organizations
Carryovers
Excess contributions may be carried forward 5 years. Qualified conservation contributions may be carried forward 15 years.
50% Limit Organizations
Examples include:
- Churches
- Educational institutions with regular faculty and enrolled students
- Hospitals and related research organizations
- Publicly supported charities
Benefit Received Rule
If the taxpayer receives a benefit in exchange for a contribution, the deduction is reduced by the FMV of the benefit.
Payments for the right to purchase athletic event seating are not deductible.
Records for Cash Contributions
To deduct cash contributions, the taxpayer must have:
- Bank records, or
- Written acknowledgment from the organization
For contributions $250 or more, acknowledgment must include:
- Organization name
- Amount
- Description of non‑cash items
- Statement of whether goods/services were provided
- Value of goods/services provided
- Statement of intangible religious benefits, if applicable
Out‑of‑Pocket Expenses for Services
The value of services is not deductible, but related expenses may be deducted if:
- Unreimbursed
- Directly connected to the services
- Incurred solely because of the services
- Not personal or family expenses
Mileage for charitable service is deductible at 14 cents per mile (2025 rate).
Conventions
A chosen representative attending a convention for a qualified organization may deduct:
- Travel
- Transportation
- Lodging
- Reasonable meals
No deduction is allowed if attending as a regular member.