When it comes to deducting charitable gifts from your 2015 taxes, all donations are not created equal. As you file your 2015 tax return and plan your charitable giving for 2016, it’s important to keep in mind the available tax deductions. Common charitable donations that can be claimed for tax deductions include:
Cash.
This includes not only actual cash, but gifts made by check, credit card or payroll deduction. You may deduct 100% of these types of charitable donations from your 2015 tax return.
Ordinary-income property.
Examples include stocks and bonds held for one year or less, inventory, and property subject to depreciation recapture. You generally may deduct only the lesser of fair market value on your 2015 tax return.
Long-term capital gains property.
You may deduct the current fair market value of appreciated stocks and bonds held more than one year.
Tangible personal property.
The tax deductions you can claim will depend on the situation.
- If the property isn’t related to the charity’s tax-exempt function (such as an antique donated for a charity auction), your tax deduction is limited to your basis.
- If the property is related to the charity’s tax-exempt function (such as an antique donated to a museum for its collection), you can deduct the fair market value.
Vehicle donations.
Unless the vehicle is being used by the charity, you generally may deduct only the amount the charity receives when it sells the vehicle.
Use of property.
Examples include use of a vacation home and a loan of artwork. Generally, you receive no tax deduction because it isn’t considered a completed gift.
Provided services.
You may deduct only your out-of-pocket expenses, not the fair market value of your services. You can deduct 14 cents per charitable mile driven.
Be aware that your annual charitable donation tax deductions may be reduced if they exceed certain income-based limits. If you receive some benefit from the charity, your deduction must be reduced by the benefit’s value. Various substantiation requirements also apply.
If you have questions about 2015 tax deduction limits and how much you can claim, contact Miller Kaplan for assistance. Our dedicated CPAs can help you with your 2015 tax returns and answer any questions you may have.
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We highly recommend you confer with your Miller Kaplan advisor to understand your specific situation and how this impacts you.
