MFHA Foundation - Frequently Asked Questions
1. Are my contributions to the MFHA Foundation (the "Foundation") eligible for a tax deduction?
Generally yes. The Foundation is an organization described under Section 501(c)(3) of the Internal Revenue Code. Contributions to 501(c)(3) organizations are generally deductible as charitable contributions on a donor's federal tax return provided that certain requirements are met. Your tax advisor can provide specifics for your situation.
2. How are contributions of property valued for tax deduction purposes?
Although there are exceptions and limitations, the amount of a deduction for contribution of real property is generally equal to the fair market value of the property at the time of the contribution. Generally, a contribution of tangible personal property is not deductible at fair market value unless the Foundation will use the item in its exempt purpose.
3. Does the IRS require that I keep any records relating to my claimed deduction?
Yes. For a cash contribution over $250 to be deductible, the IRS requires that you have a written acknowledgement of the contribution showing the Foundation's name, the date of the contribution, and the amount. A contribution that you make by payroll deduction may be substantiated by Form W-2 or other document from your employer showing the amount withheld for purpose of a payment to the Foundation.
For non-cash contributions, your records will depend on the value of the contribution. For example, if the contribution exceeds $500, you generally must maintain records including the Foundation's name; a description of the property; the fair market value at the time of the contribution, the method of determining it; a description of how/when you acquired the property; and the basis of the property. You also must fill out Form 8283 and attach it to your tax return. We would be happy to discuss other requirements applicable to non-cash contributions at your convenience.
4. Will the Foundation provide a receipt or other form of written acknowledgement of my gift?
Yes. The Foundation will provide a written acknowledgement of gifts identifying the date of the contribution, the amount of any cash contributions, a description of any non-cash property contributed, and other information as may be required by the IRS for purposes of claiming a deduction (e.g. whether the donor received any goods or services as a result of the contribution).
5. If I sign a Gift Agreement, is it a binding pledge?
Yes. A Gift Agreement is a binding pledge between the Foundation and the donor(s). When the Foundation receives a signed Gift Agreement from the donor(s), the Foundation relies on the timely payment of that gift to meet financial obligations for the development and funding of its endowment, programs and services.
6. Are there ways to give other than cash contributions?
Yes. Subject to certain restrictions, the Foundation will accept gifts in the form of tangible personal property, securities, real estate, remainder interests in property; oil, gas, and mineral interests; bargain sales; life insurance; charitable remainder trusts; charitable lead trusts; retirement plan beneficiary designations; bequests; and life insurance beneficiary designations.
7. Are the deduction rules the same for all types of non-cash contributions or are there special rules applicable to certain types of contributed property?
Special rules apply to contributions of clothing or household items; cars, boats, and airplanes; taxidermy property; property subject to debt; partial interest in property; fractional interests in tangible personal property; qualified conservation contributions; future interests in tangible personal property; inventory from your business; and patents or other intellectual property. We would be happy to discuss these rules with you in more detail at your convenience.
MFHA Foundation does not provide tax or legal advice.