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jomass · Feb 10, 2009, 03:17 PM

Question regarding what the 'rule of thumb' limits are on non-cash charitable deductions on Schedule A, before a red flag would would be raised with an audit? I'm not asking the actual legal limit, but more on what is considered 'acceptable' as a % of AGI. For example, for someone with an AGI of $140K, what amount of non-cash charity might possibly trigger an audit? I thought there was a rule of thumb about using a certain % of AGI would be considered within range, but over a certain % might get suspicions raised. Any insight into this?
Thanks

AtlantaTaxExpert · Feb 25, 2009, 11:04 AM

There are no rules of thumb that I am aware of. Each case is judged on its own merits by the IRS.

The donation history of the taxpayer would be a major consideration. Someone who consistently tithes, for example, will probably not be questions they make a large donation.

However, someone who normally gives marginal amounts WOULD have an exceptionally large donation questioned by the IRS or the state tax authorities.

If the charitable donation is properly documented, there should be little problem if the IRS or state does question it.

OneSolution · Feb 26, 2009, 03:34 PM

I make a yearly one time donation back to India.. It is usually in form of a check send to india.. and then that money is deposited in bank and donations are made later on... The donation is around 3k-4k per year

Any deductions possible?

AtlantaTaxExpert · Apr 23, 2009, 01:15 PM

That is NOT a proper paper trail, because the check is NOT made to the charity, but to the bank or a relative who then later donates over the year.

If you claim the donation and it is challenged, your proof will be insufficient to sustain the deduction and it will be disallowed.

MukatA · Apr 23, 2009, 11:41 PM

Donation to charities in India are not deductible. Only the contributions to qualified organizations or registered 501(c)3 charities are deductible.

Only Canada, Israel and Mexico has tax treaties regarding contributions. In that case also, generally you must have income from sources in that country.

Also charity deduction is itemized deduction. You will take this deduction only when you itemized deductions are more than the standard deduction. Your U.S. Tax Return: Itemized Deductions