Section 170(f)(8) of the Internal Revenue Code provides that no income tax deduction will be allowed for any contribution of $250 or more unless it is substantiated by a contemporaneous written acknowledgment by the organization receiving the contribution.¹

To qualify, the acknowledgement must be received by the taxpayer on or before the earlier of (a) the date on which the taxpayer files a return for the taxable year in which the contribution was made, or (b) the due date (including extensions) for filing such return. In addition, the acknowledgement must include the following information:

1. the amount of cash and a description (but not value) of any property other than cash contributed;
2. whether or not the organization provided any goods or services in consideration, in whole or in part, for the contribution; and
3. a description and good faith estimate of the value of any goods or services received in consideration.²

The Tax Court recently held that this rule applies even if the contribution is made to a charity controlled by the taxpayer, such as a taxpayer’s private foundation.³ Therefore, even if you are making a contribution to your own private foundation, be sure to put a receipt in your files, on foundation letterhead, and signed in your capacity as a director or officer of the foundation, that meets the above requirements.

A simple statement such as the following will suffice to meet the substantiation requirements: “Thank you for your cash contribution of $_______ to [your Private Foundation] on [Date]. No goods or services were provided for your contribution.”

If you contributed property other than cash to your private foundation, please contact us to discuss the additional applicable recordkeeping and reporting requirements.

If you have any questions regarding this Bulletin, please contact Hume Steyer (212-574-1555) or David Stutzman (212-574-1219) of our Trusts and Estates Group.

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¹ Contributions of money under $250 must be substantiated by a bank record or written communication from the donee organization indicating the name of the organization and the date and amount of the contribution. §170(f)(17). Contributions of property with a claimed deduction under $250 must be substantiated either (1) by receipt from the donee organization including the name of the organization, the date and location of the contribution, and a description of the property; or (2) by reliable written records, which are evaluated based on their reliability and content. Treas. Reg. § 1.170A-13(b)(1).

² If the goods or services provided as consideration consist solely of “intangible religious benefits,” defined as “any intangible religious benefit which is provided by an organization organized exclusively for religious purposes and which generally is not sold in a commercial transaction outside the donative context,” then a statement to that effect is sufficient.

³ See Villareale v. Comm’r, T.C. Memo. 2013-74 (March 12, 2013). In this case, the taxpayer-donor was the president of the charity.