Form 8283: Everything You Need to Know
Form 8283 allows you to declare a deduction for the worth of all property you donate to charity during the year, if you are eligible to itemize deductions. 3 min read
What Is the IRS Form 8283?
Using Form 8283, any property that is donated to a charity throughout the taxable year can be deducted if your company qualifies. Typically, most not-for-profit organizations will qualify. These qualifying charities include churches, literary organizations, schools, and other charities. The threshold for charitable donations is $500. Once your donations reach over that amount, you’ll need to submit a completed Form 8283 with your tax return.
Completing the IRS Form 8283
You use Form 8283 when you make charitable donations that are not in the form of cash. Essentially, anything other than money that you donate throughout the year can be considered eligible for the Form 8283. For example, used clothes, cars, land, artwork, or any other item that you donate.
When a Form 8283 is Necessary
A Form 8283 is necessary when you contribute more than $500 of items, other than money, to available charities throughout the year. The details about your donations should be outlined in the Form 8283 and attached, in addition to Schedule A, to your 1040 tax return.
How to Value Property Donations
Donated property is calculated using its fair market value (FMV) by the IRS. It is your obligation to accurately determing the FMV of your donated property. To determing FMV you can use a few different valuation models. Whatever strategy you use to determine the FMV of your donations, it should be defendable that the value you found would be similar to what it would be purchased for in a given market.
For instance, when you donate old clothes you could use the prices of comparable clothes found in second-hand shops in your community. This is the price that people would pay for your items on the open market and is a good estimate of its current value. Another example is if you donate a used car. To find the FMV you could take the information about your make and model, the year it was purchased, and the mileage to see what similar cars are selling at local used-car dealerships. In rare instances, you may need to hire an expert to appraise your items before donating to get the most accurate value.
Preparing Form 8283
To finish preparing the rest of the form, you must list the following:
- Name and contact information of the organizations
- Descriptions of all donated items
- Data on how you originally attained the property
- The amount you originally paid
- The respective values when donated
If you track and store this information throughout the year, it will make completing the Form 8283 a breeze when it comes time to file taxes.
Section A: Value of Items Less Than $5,000
For any non-cash donation lower than $5,000, complete Part A, Column 1 of Form 8283. Most non-cash charitable contributions fall underneath this category.
Steps to Finish Section A:
- Write the identity and contact information of the charity in column (a). Every donation should be separated line by line, even if you made multiple contributions to the same organization.
- If you donated a car, you need to check column (b) and then write the identification number (VIN) in the subsequent boxes.
- For lines A-E you will need to describe all items contributed to the organization in column (c).
- Present the date of your donation in column (d) for traces A via E. This data could also be proven in your donation receipt.
- You will then need to put the date in column (d) which should be found on the donation receipt.
- C (e), (f), and (g) should be completed if your donation is valued greater than $500. Column (e) should have “various” in it if you acquired the items across multiple dates. Column (f) should explain how you came to own the items. Column (g) should include the value of that item when you acquired it.
- Write the FMV of the donations in Column (h).
- Record how you calculated the FMV in column (i).
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