In the spirit of tax season, I thought I’d clear up confusion you may have about all the tax forms related to charitable giving. I get a LOT of questions about these tax forms, so I think it’s time to explain them in terms that everyone will understand. Taxes are confusing enough, so we’re going to keep this simple, but useful. Next time you hear someone rattle off a tax form number, you’ll feel more informed and ready to join the conversation.

Form 8283

This is the form that people ask me about the most because it is all about gifts of non-cash assets and that’s my jam. When someone contributes a non-cash asset to charity they must file Form 8283 with their taxes in order to claim a charitable income tax deduction. If the gift is valued at more than $5,000 the donor must also acquire a Qualified Appraisal of the asset to determine the value of the asset. (There are some exceptions to this requirement, such as publicly-traded securities.) The 8283 sometimes catches people off guard because it requires the signature of the donor, the charity, and the appraiser. The donor signs to attest that they made a gift of the particular asset on a specific date. The charity signs to attest that they received the particular asset on that date. The appraiser signs to attest that she completed the appraisal of the particular asset for the purposes of determining the value of a charitable gift. Many charities have asked me if it is appropriate for them to complete the 8283 as a service to the donor and my advice is “absolutely not”! Only the donor and/or her tax advisor should complete this form. I also advise that charities should only sign the form after it’s been completed and signed by the donor. Signing it before it’s completed and signed allows the taxpayer to fill in whatever data they want – whether it’s accurate or not. No charity wants to attest to a gift they never received. Can you say “tax fraud”?

Form 8282

This form is comically referred to as the “tattle-tale” form. If a charity sells a non-cash gift within 3 years of receipt, they must file Form 8282 to let the IRS know how much they sold it for. The IRS matches this form with the 8283 that the donor filed to compare the deducted amount to the sales price. If the sales price is significantly lower than the deducted amount, the donor could face an audit. The IRS wants to make sure that the deducted amount was not inflated. If the sales price is more than the deducted amount, they really don’t care. The 8282 requires the donor’s Social Security/Tax ID Number, so the charity will need to collect that at the time of the gift if they intend on liquidating the asset. The most appropriate way to collect it is with Form W-9. I recommend sending them a copy along with a self-addressed, stamped envelope and a cover letter explaining exactly why you are asking them for their Social Security number. Don’t call or e-mail the donor and ask them for their number. That’s not secure, nor is it professional.

Form 712

This form is specific to gifts of life insurance. When someone donates a life insurance contract to charity and the cash value is in excess of $5,000, they must get a Qualified Appraisal to determine the value for their charitable income tax deduction. I’m not talking about naming a charity as beneficiary of the contract. I’m talking about a gift of the contract itself. The appraiser needs specific information about the contract and that information is found on Form 712. The 712 is completed by the insurance company. It isn’t something they produce automatically. The donor or charity will have to contact the insurance company to request it. For more information on gifts of life insurance, check out this Guide to Charitable Gifts of Life Insurance.

Form 990

This is the annual tax form that public charities file with the IRS. The 990 includes virtually all of a charity’s financial data for that year – donations received, employee expenses, grants made, investment income, etc. Forms 990 filed by charities are public information. They are made available by the IRS through their online search tool. Personally, I prefer to look up 990s on Guidestar.org. I find it more user-friendly.

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