Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization (qualified under section 170(c) of the internal revenue code).
Charitable Contributions
Generally, you can deduct contributions of money or property you make to, or for the use of, a qualified organization (qualified under section 170(c) of the internal revenue code). A contribution is “for the use of” a qualified organization when it is held in a legally enforceable trust for the qualified organization or in a similar legal arrangement. The contributions must be made to a qualified organization and not set aside for use by a specific person.
The amount you can deduct for charitable contributions is generally limited to no more than 60% of your adjusted gross income (AGI). Your deduction may be further limited to 50%, 30%, or 20% of your AGI, depending on type of property you give and the type of organization you give it to.
Temporary Suspension of Limits on Charitable Contributions
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed in March 2020, temporarily removed the adjusted gross income (AGI) limitation on the deduction of certain cash charitable contributions for individuals and exempt organizations formed as trusts
qualified contributions are not subject to this limitation. Individuals may deduct qualified contributions of up to 100 percent of their adjusted gross income. A corporation may deduct qualified contributions of up to 25 percent of its taxable income. Contributions that exceed that amount can carry over to the next tax year. To qualify, the contribution must be:
- a cash contribution;
- made to a qualifying organization;
- made during the calendar year 2020
Contributions of non-cash property do not qualify for this relief. Taxpayers may still claim non-cash contributions as a deduction, subject to the normal limits.
