Registered Charitable Organizations

• Donors must give to qualified nonprofit entities. An organization must apply to the IRS for this status. Qualified nonprofit organizations include companies created with a religious, educational, charitable, literary or scientific purpose or for the prevention of cruelty to children or animals, and several other types, as outlined in IRS Publication 562. Donations to individuals, political campaigns and for-profit companies are not deductible.
  
  

Allowable Donations

• Charitable donations need not consist of cash. You can donate virtually anything with monetary value to a qualified nonprofit organization and receive a tax deduction for its value. Some common examples of non-cash donations are stocks, vehicles, computers and real estate. However, if you donate time or labor to help a charitable organization, you cannot deduct its value. If you donate blood, you cannot deduct the value of the blood, even though it is a tangible item. However, if you drive your car to and from the blood bank, as of 2011, you can deduct 14 cents per mile.
  
  

Valuation

• You must determine the fair market value of non-cash donations. For instance, you can't deduct the sticker price of a five-year-old car because its value has most likely depreciated. According to Publication 526, the fair market value of non-cash donations is their price if bought or sold on the market. The fair market value depends on the type of good. For example, if you are donating a boat, the fair market value depends on the physical condition of the boat. You must ask a marine surveyor to appraise the boat. To determine the fair market value of clothing, you may look at the price consumers pay for clothing at resale shops.
  
  

Evidence and Appraisal

• You must provide evidence such as bank records to document donations. You must provide evidence that the recipient gave you nothing in exchange for donations of $250 or more. Complete Section B of IRS Form 8283 to document non-cash donations valued at $5,000 or more. A qualified appraiser must confirm the value of these items.