Mastering Charitable Contribution Deduction Rules and Completing Form 8283

Navigating Substantiation and Appraisal Requirements, Leveraging Carry-Forwards, and Avoiding AAOI

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, July 30, 2015

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide comprehensive guidance on the substantiation, valuation, timing rules and reporting of charitable contribution deductions. The panel will detail the language necessary to qualify as a valid acknowledgment under Section 170, and will discuss valuation and appraisal requirements. The experts will also define anticipatory assignment of income and provide best practices for avoidance of ordinary income in the gifting of stock in closely-held corporations or partnerships. The panel will also provide line-by-line instructions on some of the more challenging sections of Form 8283.

Description

For most taxpayers, claiming a tax deduction for charitable contributions is a fairly straightforward process: taxpayer makes a donation, receives a letter thanking them for their contribution, and they provide the acknowledgments to their accountant and claim the deduction. 

However, for many taxpayers, the process is more complicated: What if the taxpayer doesn’t receive a qualifying acknowledgment from the charity? The IRS utilizes a mechanical test: taxpayers must be able to prove they made the claimed contribution and they must provide qualifying substantiation for the deduction to withstand audit scrutiny. There are a number of tax court cases where the IRS has audited a taxpayer and because the acknowledgment did not have the required language, the IRS disallowed the deduction, even though the taxpayer made the contribution.

There are also separate rules and thresholds for valuation and appraisal requirements. The IRS can disallow a charitable deduction claim, even if the taxpayer contributed goods to a charity, if the taxpayer fails to provide a qualified appraisal, for example.

Taxpayers who own stock in partnerships or closely-held corporations and wish to contribute the stock to an exempt organization in advance of a sale event must also be careful of the timing of any gift. Under the anticipatory assignment of income doctrine (AAOI), a taxpayer who donates shares when a sale is already mostly completed must recognize and pay tax on sale gain prior to receiving a charitable contribution deduction.

Our expert panel will discuss the various substantiation and timing requirements, and provide detailed guidance in completing some of the more challenging sections of IRS Form 8283.

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Outline

  1. Substantiation of charitable contributions for deduction
    1. Required language in acknowledgment
    2. Appraisal standards and requirements
    3. Valuation challenges for closely-held corporation stock
    4. Special Rules for Vehicles
  2. Charitable contribution carry-forward amounts
  3. Anticipatory assignment of income
  4. Examination of Form 8283

Benefits

The panel will discuss these and other key issues:

  • Specific substantiation language required by Section 170 and its regulations
  • What will—and will not—satisfy the appraisal requirements on Form 8283
  • Valuation challenges and questions
  • Timing of contributions of closely-held stock to avoid AAOI claims
  • Line-by-line examination of more problematic parts of Form 8283
  • Special rules for vehicles
  • Special rules for partial interests and restricted use property

Faculty

Thomas T. Brooks, CPA/ABV, ASA
Thomas T. Brooks, CPA/ABV, ASA

Senior Manager - Valuation Services
Cherry Bekaert

With 19 years of experience handling valuation and litigation support matters, Mr. Brooks specializes in guiding...  |  Read More

David C. Hogan
David C. Hogan

Managing Director
Ronald Blue & Co. CPAs and Consultants

Mr. Hogan provides tax and business services to the firm’s closely-held business and high-net-worth clients....  |  Read More

Joseph K. Beach, Esq.
Joseph K. Beach, Esq.

Merritt Watson

Mr. Beach focuses his practice in the areas of estate planning with a focus on philanthropic bequests and has written...  |  Read More

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