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Your antique highboy or American Primitive
painting could be a wonderful charitable gift. In fact, donating a valuable item
to charity can help reduce your taxable estate.
If your gift of tangible personal property is for a
purpose related to Smith’s educational mission, we will be happy to talk with
you about it. Books, artwork and equipment can be highly welcome additions to Smith’s
academic offerings and physical resources.
If the college is willing to accept the item you propose
to donate, you can claim a full fair market value deduction on your federal taxes.
The IRS requires that you obtain a qualified appraisal of the donated item if it
is worth more than $5,000, and the rules are quite specific. See IRS Publication
561, Determining the Value of Donated Property. (The rules are different for gifts
of artwork donated by the artist. Please call the Planned
Giving office for more information.)
Your charitable deduction is limited to 30 percent of
your adjusted gross income in the year of the gift. Any excess deduction that cannot
be claimed in the year the gift is made can be carried over for up to five additional
years.
What about personal property that Smith cannot use?
What would the college do with your Model T Ford? Your 20-foot sloop? Your grandmother’s
emerald earrings? There may be charitable organizations that can accept those gifts
in furtherance of their missions, but Smith cannot. If Smith accepts a gift that
it cannot use, it will sell the item. That will limit the charitable deduction that
the donor can claim to his or her cost basis in the donated item.
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