1. Dorcas donates a $200 hand-made robe, in very good condition, to a local public charity's thrift shop at an unattended clothing donation drop box. Because the donation drop box is unattended, she is not able to receive any receipt or other written recognition from the charity. Which statement is true?
a) The gift cannot be deducted
b) In order to deduct, she must somehow obtain a note from the charity indicating location & description of the property
c) In order to deduct, she must somehow obtain a note from the charity indicating location & description of the property, the donor & the date with a statement either that "No goods or services were provided in exchange for these gifts" or a description and value of items provided
d) In order to deduct, she only needs to have her own reliable records of value (and cost basis if relevant), charity, date & place of gift
e) The gift is deductible without documentation because receiving a receipt was impractical
2. If an employee donates via payroll deduction such that he is giving $300 from each paycheck, how would he or she document the gift if the charitable contributions of employees are divided among many different charities and so there is no specific charity from which to get a receipt?
a) The W-2 or paystub is sufficient
b) The employee must write to each separate charity supported by the united appeal
c) A pledge card indicating that no goods or services were given in exchange for the gift, along with the W-2 or paystub is sufficient
d) A cancelled check or credit card statement is sufficient
e) These gifts may not be deducted
The following options apply to all remaining questions for this chapter
I. Cancelled check, bank statement, or credit card statement
II. Note from charity indicating amount (or location & description if property), donor & date of gift
III. Note from charity indicating amount (or location & description if property), donor & date of gift with statement either that "No goods or services were provided in exchange for these gifts" or description and value of items provided
IV. Donor's own reliable records of value (and cost basis if relevant), charity, date & place of gift
V. IRS Form 8283 (Noncash Charitable Contributions)
VI. IRS Form 1098-C (Contributions of Motor Vehicles, Boats, & Airplanes) from charity 30 days after gift or sale
VII. A summary of a qualified appraisal attached to the tax return
VIII. A qualified appraisal attached to the tax return
3. Ann O. Nemus receives a large collection of ancient coins known as Leptons from her husband's estate. She gives this collection, worth $510, to her local synagogue. What items must she have in order to document this gift?
a) I
b) I or II
c) I or II or III
d) I or II or III or IV
e) III, IV & V
4. In which of the following cases would a donor need III, IV, V, and VIII in order to properly document a charitable gift?
a) Donor donates non-publicly traded stock valued at $600,000
b) Donor donates publicly traded stock valued at $2,000,000
c) A cash gift of $600,000 to a public charity
d) Clothing in good condition valued at less than $400
e) Donation of collectibles with a basis and fair market value of $4,000
5. Dorcas gives $2,000,000 in stock in Tabitha's Textile Manufacturing Corporation, a publicly traded corporation, to a local poverty relief charity. What items must she have in order to document the gift?
a) III & IV
b) III, IV, and V
c) III, IV, V, and VII
d) III & V
e) III, IV, V, VII and VIII
6. James and John, joint owners as tenants in common of a fishing boat worth $11,000, give it to the local Boy Scouts of America. What items must they have in order to document the gift?
a) III & IV
b) III, IV, V, and VI
c) III, IV, and VI
d) IV and VI
e) III, IV, V, VI, and VII
7. Zebedee gives a small boat worth $400 to the local Boy Scouts of America to be used in their camping trips. What items must he have in order to document the gift?
a) III & IV
b) III, IV, V, and VI
c) III, IV, and VI
d) IV and VI
e) III, IV, V, VI, and VII
8. Jezebel purchases a vineyard at the estate sale of a deceased acquaintance named Naboth for $650,000. She then donates the vineyard to the Society Against Public Defamation, a public charity. What items would be sufficient to document this gift?
a) III
b) III & IV
c) III, IV, & V
d) III, IV, V, & VI
e) III, IV, V, & VIII
9. Herodias gives a slightly used silver platter, valued as artwork, to an art museum for display in their collection. She deducts $25,000 for her gift. What items would be sufficient to document this gift?
a) III
b) III & IV
c) III, IV, & V
d) III, IV, V, & VII
e) III, IV, V, & VIII
10. Tamar gives an intricately carved walking staff with a fair market value of $1,100 to Planned Parenthood, a public charity. What items would be sufficient to document this gift?
a) I
b) III, IV & V
c) III, IV, V & VII
d) III
e) IV
11. Mary gives $35,000 worth of pure nard (an expensive perfume) for use by a charitable organization providing burial services to needy families. What items would be sufficient to document this gift?
a) I
b) III, IV & V
c) III, IV, V & VII
d) III, IV, V & VIII
e) IV
12. Rahab purchases $400 worth of red ribbon for a community charity to use in children's art projects. What items would be sufficient to document this gift?
a) I
b) III and IV
c) III, IV, and V
d) III
e) IV
13. Mary donor makes a gift by check of $200 at the morning services of her church. At the evening service on the same day, she makes another gift by check of $200. What items would be required to document this gift?
a) I only
b) I & II
c) I & III
d) III, but not just I by itself
e) I, II, and III
14. Mary donor makes a cash gift of $300 to her local church. What items would be sufficient to document this gift?
a) I or II
b) III
c) I and III
d) I, II, and IV
e) IV
Answers
1/ Answer: D. Explanation: For property gifts under $250, a receipt or note from the charity is not required where it is impractical. However, the donor must have her own reliable documentation showing the value (and cost basis if relevant), charity, date & place of gift.
2/ Answer: C. Explanation: Because of the impracticality of receiving a receipt or acknowledgement from the charity in this circumstance, a pledge card indicating that no goods or services are given in exchange for the gift, along with the W-2 or paystub is sufficient documentation.
3/ Answer: E. Explanation: Although the items being given are coins, they are valued as an item of property rather than as a currency. As such, they must follow the rules for a gift of $510 of property, which require III, IV & V. IRS Form 8283 is required for any gifts of property worth more than $500 and so is required in this circumstance.
4/ Answer: A. Explanation: A qualified appraisal is not required to be attached to the tax return for any amount of cash or publicly traded securities, but would be required for property worth more than $500,000.
5/Answer: B. Explanation: Publicly traded securities do not require any appraisal, thus VII and VIII are unnecessary. Publicly traded securities are valued based upon the market price. However, because the gift is a gift of property over $500, Form 8283 must be included with the tax return. As with any other gift of property worth $250 or more, III and IV are both required.
6/ Answer: E. Explanation: As with any other gift of property worth $250 or more, III and IV are required. IRS Form 8283 is required for any gifts of property worth more than $500 and so is required in this circumstance. Because the property qualifies as a car, boat, or airplane worth over $500, Form 1098-C is also required. Finally, because the gift is $5,000 or more, but less than $500,000, a summary of a qualified appraisal is required.
7/ Answer: A. Explanation: The IRS Forms 8283 and 1098-C are required only for gifts of property over $500 in value and thus do not apply. Consequently, this gift is documented as any other gift of property worth $400, which is by III & IV.
8/Answer: E. Explanation: All property gifts of at least $250 require both III and IV. All gifts of property over $500 must have IRS Form 8283. Gifts of property worth more than $500,000 or gifts of artwork worth more than $20,000 must have a qualified appraisal attached to the tax return.
9/ Answer: E. Explanation: All property gifts of at least $250 require both III and IV. All gifts of property over $500 must have IRS Form 8283. Gifts of property worth more than $500,000 or gifts of artwork worth more than $20,000 must have a qualified appraisal attached to the tax return.
10/ Answer: B. Explanation: All property gifts of at least $250 require both III and IV. All gifts of property over $500 must have IRS Form 8283. No appraisal forms need be filed with the tax return as the gift is under $5,000
11/ Answer: C. Explanation: All property gifts of at least $250 require both III and IV. All gifts of property over $500 must have IRS Form 8283. Because the property gift is more than $5,000 a summary of a qualified appraisal must also accompany IRS Form 8283.
12/ Answer: B. Explanation: All property gifts of at least $250 require both III and IV. Because the gift is worth less than $500, no additional documentation is necessary.
13/ Answer: A. Explanation: These gifts are both under the $250 limit, so the donor is not required to have option III as she would if she gave one gift of $400.
14/ Answer: C. Explanation: A cancelled check or credit card statement is insufficient documentation for gifts of $250 or more. These gifts require a note from the charity indicating amount and description of any goods or services provided in exchange that is delivered before the taxes are filed (or before taxes are due if not filed in a timely manner).