How to Record the Donation of Property on My Books

Donated property is governed by strict tax laws that require you to properly record these donations. Recording donations of property assists the donor and the receiving organization in filing for tax deductions with the Internal Revenue Services. By making a donation you can reduce your taxable income and lower your tax bill as well.

Instructions

    • 1

      Make a list of the things you have donated. Obtain a receipt or other documentation for the donation. Keep the receipt because it serves as proof for the IRS to allow for a tax deduction for the donated property.

    • 2

      Establish the value of the property donated. For high-value property worth more than $5,000, you will need a written appraisal from a qualified appraiser to verify value of your deduction. According to the IRS, you should always submit a copy of the appraisal with your tax return. The donated property's fair market value will determine how much tax is deductible.

    • 3

      Establish the accounting details of every property you own. Donations recorded on the general ledger are commonly input as "Other Income." As such, the noncash donation is subject to tax deduction when an IRS audit is performed.

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