In addition to noncash charitable contributions, taxpayers can make certain donations of property as outlined below.
- Gifts of appreciated capital-gain property held for more than 12 months are subject to special rules. This type of property includes stocks and bonds, artwork, jewelry, coins, land, etc. The deduction amount depends on the kind of property donated, the charitable organization, and the use of the property by the recipient organization. The rules surrounding this type of contribution are complicated and you should consult with this office for the tax ramification of such a contribution.
- Uniforms - A taxpayer can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that the taxpayer must wear while performing donated services for a charitable organization.
- Depreciation of Capital Assets - No deduction is allowed for the depreciation of a capital asset as a charitable deduction. This includes vehicles (that's why there is no imputed depreciation in the mileage rate), computer, etc. Example: Kathy volunteers as a member of the sheriff's mounted search and rescue team. As part of volunteering, Kathy is required to provide a horse. Kathy is not allowed to deduct or depreciate her horse. She can, however, deduct uniforms, travel, and other out-of-pocket expenses associated with the volunteer work.
- Business Expenses of Some Public Employees May Qualify as Charitable Contributions - Normally, employee business expenses are deducted as a miscellaneous itemized deduction. However, miscellaneous deductions are limited to those expenses that exceed 2% of a taxpayer's Adjusted Gross Income. As a result, these deductions may be reduced or eliminated altogether.
However, taxpayers like teachers who work for the public school system, can treat their expenses as a charitable contribution, thus eliminating the 2% of AGI limitation. IRS instructions specifically allow contributions of cash or goods to the U.S. Government or state agencies including political subdivisions such school districts, police departments, etc.