Give your old clunker to a public television station. Let the local fire department burn down your old shack in the country as part of a training exercise. Gift that Van Gogh to the local art museum. Get a substantial charitable tax deduction in return. Sounds great, right? But if you plan to claim a substantial charitable deduction on your income tax return, be aware that you must substantiate the value of your gifts through (1) contemporaneous written acknowledgment form the donees (for contributions of at least $250; and (2) get a written appraisal from a legitimate appraiser for donations of items valued at over $5,000. If you fail to do so, the IRS may not only deny your deduction, it may even assess with you with a large penalty for negligence.
For more information on this topic, visit www.irs.gov and/or schedule a consultation with us.