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What can we learn about non-cash donations from deductions reported - - PowerPoint PPT Presentation

Oct 18, 2022 256 likes •401 views

Charitable Deductions for Donations of Non-cash Property What can we learn about non-cash donations from deductions reported on individual income tax returns? Gerald Auten Office of Tax Analysis, Treasury Department The views and opinions

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Charitable Deductions for Donations of Non-cash Property

What can we learn about non-cash donations from deductions reported on individual income tax returns?

Gerald Auten Office of Tax Analysis, Treasury Department The views and opinions expressed are those of the author and do not necessarily represent official Treasury positions or policy. September 27, 2012

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Some background on the SOI data collection program on non-cash donations.

  • Collection of data began in 2003.
  • SOI records information on individual donations reported
  • n Form 8283, including:
  • taxpayer descriptions of property
  • values
  • SOI classifies by types of asset and donee.
  • Sample: Annual SOI cross-section of about 40,000 returns.
  • Most taxpayers report non-cash donations only on

Schedule A (no details), but most of the dollar amounts are

  • n Form 8283.
  • Data can be found at irs.gov/TaxStats
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50 100 150 200 250 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 Source: IRS Statistics of Income

Individual Cash, Noncash and Total Charitable Deductions, 1988-2010

Total Cash Noncash

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Major Types of Non-cash Donations

(billions of dollars)

Type & Form 2007 2010 Securities 27.1 16.9 Real estate 8.1 6.1 Clothing 7.6 8.3 Household items 5.1 4.1 Other 4.9 3.5 Form 8283 Total 52.8 38.9

  • Sch. A only

5.9 5.4 Total 58.7 44.3

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Major Types of Charities Receiving Non-Cash Donations

(billions of dollars)

Type of Donee 2005 2007 2010 Social welfare 11.2 12.3 11.4 Foundations 9.8 14.1 8.7 Donor-advised funds 1.6 3.5 1.8 Education 4.2 8.1 2.9 Health 1.6 1.6 2.7 Religious Org. 4.5 4.2 2.8 Arts and culture 1.3 1.7 1.5 Other 6.8 7.3 7.0 Total 41.1 52.8 38.9

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Types of Donated Property Varies by Income, 2007

AGI Class Total $ Amounts

($billions)

Stock % Real Estate % Clothing and HH Items % Other % Under $100k 7.5 5 3

69

24 $100-200k 6.1 10 4

72

14 $200-$1m 9.9 29

40

18 14 $1m-10m 11.7

62 22

2 15 $10m + 17.6

80

6 13 Total 52.8 48 15 22 15

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The Effects of Policy Change: Vehicles

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Another Policy Change: Clothing

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Conservation and Facade Easements, 2004-2010

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Page 2 of 8283

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Only about 3,300 fill out the lower half of Page 1 vs about 100,000 donations of art, real estate, and other items that could potentially involve donations of partial interests.

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What we don’t know from the data?

  • How good are the valuations?
  • How do the benefits to the charities and their

beneficiaries compare to the amounts deducted?

  • How soon do donations to DAFs reach the charities?

– How many accounts seem dormant for long periods?

  • Less information on corporate donations.
  • What is happening with easements? Is the decline

due to the recession or changes in enforcement?

  • How might tax reform affect donations? What are

the effects of a 2% floor? Conversion to a credit?