Did you donate a vehicle, stocks, property, art, or other noncash items to qualifying charities this year? If so, you may be able to deduct the value of those items from your taxable income if you itemize your deductions — including noncash contributions.
You don’t need to file any additional paperwork for relatively small donations. You do, however, need to file Form 8283 if the value of your donation is over $500. Luckily, this form is short and straightforward. This guide will walk you through who can file this form and how to fill it out.
What Is Form 8283?
Internal Revenue Service (IRS) Form 8283 describes deductions for noncash charitable contributions worth $500 or more. This includes both single contributions and groups of similar items. For instance, you need to fill out the form if you donate an old vehicle worth $1,000 or a bag of clothing worth a total of $600.
In contrast, you don’t need to file this form if you donate a $300 painting and $400 in stocks. In this case, no single item is over the $500 threshold, and the items are not similar enough to be grouped together.
When You Should File Form 8283
You only need to file Form 8283 if you plan to claim deductions for noncash donations worth $500 or more. You don’t need to file this form if you make a noncash donation and don’t want to claim a tax deduction. Here’s a look at the essentials.
1. Who Can Use Form 8283?
Individuals, partnerships, S corporations, and C corporations can all file this form. C corporations face special rules shown below.
2. Do C-Corps Need to File Form 8283?
C corporations only need to file the form if they deduct over $5,000 in charitable contributions for a single item or a group of similar items.
3. What Type of Contributions Do You Report?
You should only report donations made to qualifying charities and want to report the donations to claim a tax deduction.
4. Where Do You Report Contributions on Form 8283?
Report donations of $5,000 or less and publicly traded securities, vehicles, intellectual property, and inventory or property that your business normally sells to customers in Section A. Donations that don’t fall into these categories are reported in Section B.
5. What Details Do You Need About Noncash Donations?
For items reported in Section A, simply list the name of the charity organization, a description of the property, and the vehicle identification number (VIN) for vehicles. Then, note the date of the contribution, its fair market value, and how you assessed its fair market value. Items worth over $500 will need the date you acquired the item, how you acquired the item, what you paid for the item.
That is all the information you need if every item or group of items you donated is worth less than $5,000 or if your donations fall into the categories listed above. You will need to provide some additional information if you made larger donations in the tax year, however. Always reach out to a tax professional with additional questions about Form 8283.
How to Report Noncash Donations Worth Over $5,000
You need to include the following details on Form 8283 if you’re claiming deductions for noncash donations worth over $5,000. This information applies to Section B of the form.
1. Information on Donated Property
In this section, simply tick a box showing what type of donation you made. Options include art, equipment, real estate, securities, clothing, collectibles, and more.
2. Description of Donated Property
Describe the donated property, its physical condition, and its appraised fair market value. Also note the date you acquired the item, how you acquired it, your cost, the date of the contribution, and how much you claimed as a deduction.
3. Appraisals for Items Reported
You need to obtain a written appraisal of items listed in Section B. Keep the appraisal for your records. You will only need to attach a copy of the appraisal to your tax return if the deduction is for art worth $20,000 or more, easements on buildings in historic districts, and deductions worth more than $500,000.
Ensuring that you get the right deduction for these valuable contributions and reporting the above information on your Form 8283 is a critical part of this process. Unfortunately, the IRS may reject your deduction if you fail to provide adequate supporting documentation for your claims. Always speak to a tax professional to make sure your form is filled out correctly.
Potential Complications with Form 8283
Form 8283 can get confusing in certain situations. You must note the following if you kept partial interest or placed conditions on a donation besides qualified conservation property:
- Location of tangible property.
- Name of anyone besides the charity that received the donation and who has possession of the property.
- Name of anyone besides the charity that received the donation and who has the right to income for the property.
- Names of organizations that you made restricted or partial contributions to in the past.
You must also list all the items included in Section B that have an appraised value of $500 or less. This may seem odd as Section B only includes items worth over $5,000. This rule comes into play when you have donated a group of similar items totaling over $5,000.
The appraiser and a representative from the charity that received the donation must sign the form. By signing, the charity declares that it is a qualified organization under section 170(c), and it agrees to file Form 8282 if it sells any property described in Section B, Part 1, within three years.
Get Help with Form 8283
Claiming deductions for charitable contributions can be an effective way to offset your tax liability. The IRS, however, looks at these deductions very closely. You must complete Form 8283 accurately to ensure you get the right deduction for your contribution.
Silver Tax Group is dedicated to providing our clients with the high-quality help and services they need to navigate the world’s most complicated tax code. Have you made a noncash contribution? Want to ensure you get the maximum deduction for your donation? Contact Silver Tax Group for help filing Form 8283.
