Stricter Rules for Gifting

September 21, 2006

If you give money or non-cash donations to charity, you’ll be interested in some of the provisions of the new Pension Protection Act.

There are two changes affecting charity:  the first is that you are now required to maintain written documents for any cash gifts in order to claim a deduction.  Most churches will send you a statement at the end of the year, if you use the envelopes provided, or write a check.  But gone are the days of dropping cash into the collection plate or the Salvation Army bucket.

Second, if your donated non-cash items aren’t in "good" condition, you won’t get a deduction.  This is to keep people from taking large deductions for items that really belong in the trash.  Of course, no-one has defined what "good" condition is yet, so use your common sense when donating items.

New pension law closes loopholes in charity deductions – LA Times
The Pension Protection Act of 2006 offers retirement tax breaks, tough rules on charity –


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Kristine McKinley, CFP®, CPA, is the founding principal of Beacon Financial Advisors, LLC, an independent, fee-only financial planning firm located in Lee’s Summit, Missouri and serving the greater Kansas City area.

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In the News

Investment News – Kristine McKinley discusses the 0% Social Security COLA (for 2016) in No Social Security cost-of-living adjustment in 2016.

Kiplinger Magazine/NAPFA – Kristine McKinley answered reader’s tax questions during the 2013 Jump Start Your Retirement Plan Days sponsored by Kiplinger magazine and the NAPFA Consumer Education Foundation.