For donations of money or items
The IRS requires that “a tax-exempt organization send a formal acknowledgment letter for any donation that is more than $250” and “in writing, at the time of solicitation or when the payment is received, and in a way that will come to the attention of the donor”. The donor will use the tax letter emailed from using this form as “proof of his or her donation to claim a tax deduction.” IRS Publication 1771.
For the letter to be considered “contemporaneous” with the contribution, “a donor must receive the acknowledgment by the earlier of: the date on which the donor actually files his or her individual income tax return for the year of the contribution; or the due date (including extensions) of the return.” IRS Publication 1771. This is why we generate the tax letter on the spot.
Household items and clothing contributed to charity must be in at least good used condition to be deductible. This requirement does not apply to contributions of food, paintings, antiques, other art objects, jewelry and gems, or collections, and does not apply to a contribution of an item for which a deduction of more than $500 is claimed IF the taxpayer obtains a qualified appraisal of the item.
Quid Pro Quo Donations are contributions made by a donor in exchange for goods or services. This can occur when a donor says, “I’ll give it to you if you just take it away.”
Donors may only take a contribution deduction to the extent that their contributions exceed the fair market value of the goods or services the donors receive in return for the contributions; therefore, donors need to know the value of the goods or services.
An organization must provide a written disclosure statement to a donor who makes a payment exceeding $75 partly as a contribution and partly for goods and services provided by the organization.
Example: A gas stove valued at $50 is donated in exchange for for “hauling it away”. If the value of “hauling it away” is $25 the donor may claim a $25 deduction on their taxes. It’s best for the donor if there is no quid pro quo.