Tax deduction limits on charitable donations

Written by evan mckinney
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An individual is typically allowed to claim the total amount that she donated to charity during the tax year as a tax deduction when she files her taxes. However, the IRS has established a series of regulations that limit the total amount that an individual can deduct, which means that these deductions can be extremely confusing for anyone that doesn’t understand the limits.

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Charity Types

The IRS recognises two main types of charities, which includes 50 per cent limit charities such as churches or private research foundations and non-50 per cent limit charities such as fraternities or veteran’s organisations.

Cash/Property

An individual may deduct up to 50 per cent of his gross income for any cash or property that he donated to a charity identified as a 50 per cent limit charity.

Capital Gains

An individual may deduct up to 30 per cent of her gross income for any capital gains that she donated to a 50 per cent charity or up to 20 per cent for a non-50 per cent charity.

Carryover

An individual may carry a deduction for a charitable donation over to the following year (for a maximum of 5 years) if the individual filing the return has already claimed the limit.

Non-50 Percent Charities

An individual may deduct up to 30 per cent of his gross income for any cash or property that he donated to any non-50 per cent limit charity.

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