Qualified charitable distributions from IRAs. If you were at least age 70½ when you had a qualified charitable distribution (QCD) from your IRA made directly by the trustee to a charitable organization, the QCD may be nontaxable. However, you cannot take a charitable contribution deduction for the QCD on your Schedule A (Form 1040). See chapter 17 for more information about QCDs.

Clothing and household items. You cannot take a deduction for clothing or household items you donate after August 17, 2006, unless the clothing or household items are in good used condition or better. See Clothing and household items under Contributions of Property in this chapter.

Food inventory. The special rules that apply to contributions of food inventory were due to expire at the end of 2005 but have been extended to contributions made in 2006 and 2007. See Publication 526 for more information.

Limit on qualified conservation contributions increased. The limit on the deduction for certain contributions of capital gain property has been increased from 30% of adjusted gross income (AGI) to 50% of AGI in the case of qualified conservation contributions. The limit is 100% of AGI for certain farmers and ranchers. See Publication 526 for more information.

Easements on buildings in historic districts. New requirements apply to contributions after July 25, 2006, of certain easements on buildings in registered historic districts. See Publication 526 for more information.

Taxidermy property. New rules limit deductions for contributions of taxidermy property after July 25, 2006. See Publication 526 for more information.

Recapture of certain deductions. Part of the deduction for certain contributions of tangible personal property after September 1, 2006, will be recaptured, or the amount of the deduction limited, if the recipient organization sells the property within 3 years and does not certify its exempt use. See Publication 526 for more information.

Fractional interests in property. New rules apply to the contribution of fractional interests in tangible personal property after August 17, 2006. See Publication 526 for more information.

New recordkeeping requirements for cash contributions. You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written communication from the charity. The written communication must include the name of the charity, date of the contribution, and amount of the contribution.

Contributions of cars, boats, and airplanes. If you donate a car, boat, or airplane to a qualified organization, your deduction generally is limited to the gross proceeds from its sale by the organization. This rule applies if the claimed value of the donated vehicle is more than $500. For exceptions and more information, see Cars, boats, and airplanes under Contributions of Property.

Written acknowledgment required. You can claim a deduction for a contribution of $250 or more only if you have a written acknowledgment of your contribution from the qualified organization or if you have certain payroll deduction records. For more information, see Records To Keep, later in this chapter.

Limit on itemized deductions. If your adjusted gross income is more than $150,500 ($75,250 if you are married filing separately), the overall amount of your itemized deductions may be limited. See chapter 29 for more information about this limit.

This chapter explains how to claim a deduction for your charitable contributions. It discusses the following topics.

A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value.

You can deduct your contributions only if you make them to a qualified organization. To become a qualified organization, most organizations other than churches and governments, as described below, must apply to the IRS.

Generally, you can deduct your contributions of money or property that you make to, or for the use of, a qualified organization. A gift or contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement.

If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. See Contributions of Property, later in this chapter.

Your deduction for charitable contributions is generally limited to 50% of your adjusted gross income, but in some cases 20% and 30% limits may apply. See Limits on Deductions, later.

Table 24-1 lists some examples of contributions you can deduct and some that you cannot deduct.

Contributions From Which You Benefit

If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive.

If you pay more than fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. For the excess amount to qualify, you must pay it with the intent to make a charitable contribution.

Example 1.

You pay $65 for a ticket to a dinner-dance at a church. All of the proceeds of the function go to the church. The ticket to the dinner-dance has a fair market value of $25. When you buy your ticket, you know that its value is less than your payment. To figure the amount of your charitable contribution, you subtract the value of the benefit you receive ($25) from your total payment ($65). You can deduct $40 as a contribution to the church.

Example 2.

At a fund-raising auction conducted by a charity, you pay $600 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable contribution.

Athletic events.   If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution.

  If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. In that case, subtract the price of the tickets from your payment. 80% of the remaining amount is a charitable contribution.

Example 1.

You pay $300 a year for membership in an athletic scholarship program maintained by a university (a qualified organization). The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. You can deduct $240 (80% of $300) as a charitable contribution.

Table 24-1. Examples of Charitable Contributions—A Quick Check

Use the following lists for a quick check of contributions you can or cannot deduct. See the rest of this chapter for more information and additional rules and limits that may apply.
Deductible As Charitable Contributions	Not Deductible As Charitable Contributions
Money or property you give to: Churches, synagogues, temples, mosques, and other religious organizations Federal, state, and local governments, if your contribution is solely for public purposes (for example, a gift to reduce the public debt) Nonprofit schools and hospitals Public parks and recreation facilities (but not entry or usage fees) Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts, Girl Scouts, Boys and Girls Clubs of America, etc. War veterans groups	Money or property you give to: Civic leagues, social and sports clubs, labor unions, and chambers of commerce Foreign organizations (except certain Canadian, Israeli, and Mexican charities) Groups that are run for personal profit Groups whose purpose is to lobby for law changes Homeowners' associations Individuals Political groups or candidates for public office
Costs you pay for a student living with you, sponsored by a qualified organization	Noncharitable payments to federal, state, and local governments
Out-of-pocket expenses when you serve a qualified organization as a volunteer	Cost of raffle, bingo, or lottery tickets
	Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups
	Tuition
	Value of your time or services
	Value of blood given to a blood bank

  

Example 2.

The facts are the same as in Example 1 except that your $300 payment included the purchase of one season ticket for the stated ticket price of $120. You must subtract the usual price of a ticket ($120) from your $300 payment. The result is $180. Your deductible charitable contribution is $144 (80% of $180).

Charity benefit events.   If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive.

  If there is an established charge for the event, that charge is the value of your benefit. If there is no established charge, your contribution is that part of your payment that is more than the reasonable value of the right to attend the event. Whether you use the tickets or other privileges has no effect on the amount you can deduct. However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket.

  

Even if the ticket or other evidence of payment indicates that the payment is a “contribution,” this does not mean you can deduct the entire amount. If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount.

Example.

You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Printed on the ticket is “Contribution—$40.” If the regular price for the movie is $8, your contribution is $32 ($40 payment - $8 regular price).

Membership fees or dues.    You may be able to deduct membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that is more than the value of the benefits you receive. You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. They are not qualified organizations.

Certain membership benefits can be disregarded.   Both you and the organization can disregard certain membership benefits you get in return for an annual payment of $75 or less to the qualified organization. You can pay more than $75 to the organization if the organization does not require a larger payment for you to get the benefits. The following benefits are covered under this rule.

1. Any rights or privileges, other than those discussed under Athletic events, earlier, that you can use frequently while you are a member, such as:

   1. Free or discounted admission to the organization's facilities or events,

   2. Free or discounted parking,

   3. Preferred access to goods or services, and

   4. Discounts on the purchase of goods and services.

2. Admission, while you are a member, to events that are open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $8.60.

Token items.   You can deduct your entire payment to a qualified organization as a charitable contribution if both of the following are true.

• You get a small item or other benefit of token value.

• The qualified organization correctly determines that the value of the item or benefit you received is not substantial and informs you that you can deduct your payment in full.

Written statement.   A qualified organization must give you a written statement if you make a payment to it that is more than $75 and is partly a contribution and partly for goods or services. The statement must tell you that you can deduct only the amount of your payment that is more than the value of the goods or services you received. It must also give you a good faith estimate of the value of those goods or services.

  The organization can give you the statement either when it solicits or when it receives the payment from you.

Exception.   An organization will not have to give you this statement if one of the following is true.

1. The organization is:

   1. The type of organization described in (5) under Types of Qualified Organizations, earlier, or

   2. Formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context.

2. You receive only items whose value is not substantial. See Token items, earlier.

3. You receive only membership benefits that can be disregarded, as described earlier.

Expenses Paid for Student Living With You

You may be able to deduct some expenses of having a student live with you. You can deduct qualifying expenses for a foreign or American student who:

1. Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student,

2. Is not your relative or dependent, and

3. Is a full-time student in the twelfth or any lower grade at a school in the United States.

You can deduct up to $50 a month for each full calendar month the student lives with you. Any month when conditions (1) through (3) above are met for 15 days or more counts as a full month.

For additional information, see Expenses Paid for Student Living With You in Publication 526.

Mutual exchange program.   You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country.

Table 24-2. Volunteers' Questions and Answers

If you do volunteer work for a qualified organization, the following questions and answers may apply to you. All of the rules explained in this chapter also apply. See, in particular, Out-of-Pocket Expenses in Giving Services.
Question	Answer
I do volunteer work 6 hours a week in the office of a qualified organization. The receptionist is paid $10 an hour to do the same work I do. Can I deduct $60 a week for my time?	No, you cannot deduct the value of your time or services.
The office is 30 miles from my home. Can I deduct any of my car expenses for these trips?	Yes, you can deduct the costs of gas and oil that are directly related to getting to and from the place where you are a volunteer. If you don't want to figure your actual costs, you can deduct 14 cents for each mile.
I volunteer as a Red Cross nurse's aide at a hospital. Can I deduct the cost of uniforms that I must wear?	Yes, you can deduct the cost of buying and cleaning your uniforms if the hospital is a qualified organization, the uniforms are not suitable for everyday use, and you must wear them when volunteering.
I pay a babysitter to watch my children while I do volunteer work for a qualified organization. Can I deduct these costs?	No, you cannot deduct payments for child care expenses as a charitable contribution, even if they are necessary so you can do volunteer work for a qualified organization. (If you have child care expenses so you can work for pay, see chapter 32.)

There are some contributions you cannot deduct, such as those made to specific individuals and those made to nonqualified organizations. (See Contributions to Individuals and Contributions to Nonqualified Organizations, next). There are others you can deduct only part of, as discussed later under Contributions From Which You Benefit.

If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value of the property at the time of the contribution. However, if the property has increased in value, you may have to make some adjustments to the amount of your deduction. See Giving Property That Has Increased in Value, later.

For information about the records you must keep and the information you must furnish with your return if you donate property, see Records To Keep and How To Report, later.