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What Is Form 8283?
Form 8283 is a tax reporting form used to report donations to charities. If you donate property valued at $500 or more during the calendar year, you must complete and submit Form 8283 within 30 days of making the gift. This includes cash gifts, securities, life insurance policies, annuities, real estate transfers, and other items.
The IRS requires donors to provide information such as the name of the charity, date of the transaction, type of gift, the value of the gift, and whether the donor received goods or services in exchange for the gift. Donors are required to attach Form 8283 to their tax returns, regardless of whether they claimed a deduction for the contribution on their taxes.
Donations of appreciated assets can qualify for tax deductions under Section 170(e)(3) of the federal tax code. However, donors must still complete and submit Form 8282, even though the asset is already worth more than $5,000. This article has been prepared by a Denver business attorney and Denver tax attorney to discuss charitable contributions.
The Two Parts of Form 8283
Form 8283 is a two-part form used to report noncash charitable contributions to qualify for an itemized deduction. This form must be filed along with your federal income tax return.
The form consists of two parts. Part one covers contributions valued up to $5,000. If you contribute to property worth more than $5,000, you file part 2 of the form.
Part 1 of the form provides information about the type of gift, the date it was made, and the donee’s name. In addition, section A requires the donor to list the fair market value of each contribution.
Section B is optional and allows donors to report more than $5,000. For example, if you donate stock to charity, you may want to include the total value of the stock in this section.
Charitable Contributions
Noncash contributions are items such as property, artwork, clothing, furniture, books, etc., given to charity. Businesses, organizations, or individuals often donate them. These donations aren’t subject to sales taxes because they don’t go toward purchasing goods and services. Instead, they’re deductible on federal income tax returns.
Section A of Form 8283 requires taxpayers to list the name of the donee organization, the date of the gift, the value of the item(s), and whether it was received directly or indirectly. For example, if you donate a painting to a museum, you’d list the name of the museum, the date of the donation, the value of the painting, and whether it was received “directly” or “indirectly.”
Section B of Form 8283 covers gifts over $5,000. In this section, the donor must provide information about the nature of the gift, including the type of property donated, the property’s fair market value, the payment method, and the date acquired.
For example, if you give $10,000 worth of stock to a nonprofit organization, you’d list the value of the stock, how much you paid for it, and the date you bought it. You’d also indicate whether the gift was made “in one transaction” or “over several transactions.”
The IRS doesn’t require donors to use Form 8283. However, it does recommend that those making significant noncash contributions file the form. To ensure you do, complete Form 8283 for each noncash contribution of $5,000.
Donee Information
The donor organization files this form if it sells, transfers, or disposes donated property. The form must be filed with the IRS within 30 days after the end of the calendar year following the year the donation occurred. Donated property is defined as the property received for public use or benefit. A gift is treated as having been given during the calendar year in which it was transferred.
If you donate property worth over $5,000, you must file Form 8283. The form covers donations of cash, securities, and real estate. You must complete Schedule B even if you don’t owe the property’s value tax.
Where to Find Form 8283
The Internal Revenue Service offers Form 8283, “Sales and Other Dispositions of Capital Assets,” on its website. This form must be completed when selling capital assets such as vehicles, real estate, etc., and includes information about how much money was received and what percentage of the proceeds went toward buying another asset. If you sell stock options, you must use Form 8949, “Reportable Transaction – Sale of Certain Securities.”
Form 8283 Requirements
Form 8283, “Noncash Charitable Contributions,” requires filers to report contributions valued at $250 or more. This includes gifts of cash, stocks, bonds, mutual funds, life insurance policies, annuities, retirement accounts, real estate, and personal property. If you make a gift of property worth less than $500, you don’t have to file Form 8283. But you still need to complete Schedule A, Itemized Deductions, on your federal income tax return.
The IRS allows taxpayers to deduct up to 50% of the fair market value of donated tangible property. For example, if you give away a car, you can claim a deduction equal to half the cost of the car ($5,000).
You can deduct the total donation amount even if you don’t itemize deductions on your taxes. However, if you itemize, you can subtract only those expenses related to the donation.
If you make multiple donations during the same calendar year, you can combine them into one total deduction.
To qualify for the deduction, the donor must establish that the property was given away without expecting to receive anything in return.
A gift recipient may also choose to receive a charitable deduction for the contribution.
Takeaways
Noncash contributions are deductible under Section 170(c)(2) of the Internal Revenue Code. If you donate property, you must file IRS Form 8283 within 30 days of contributing. You cannot deduct the value of certain types of gifts unless you itemize deductions on Schedule A of your federal income taxes. These include:
- Household goods and furnishings valued at up to $500.
- Clothing worth up to $250.
- Books, records, and similar items worth up to $200.
- Artwork, antiques, collectibles, jewelry, musical instruments, sports equipment, tools, and toys worth up to $50 each.
- Donations of vehicles and real estate.
- Charitable contributions of securities, stock, bonds, mutual funds, and insurance policies.
This article was prepared by a tax attorney at The McGuire Law Firm. If you have any questions about charitable contributions, Form 8283, or other tax matters, please contact our firm to speak with a Denver tax attorney.
