How to make sure donations count during tax season
It's that time of year when we are putting all those tax forms together to file our taxes. There's one that many of us don't have, but really do need.
EAST GRAND FORKS — As he was dying of cancer, Jim Fischer donated thousands of books to the Campbell Library in East Grand Forks. The Fischer family received a thank you card in return.
However, months later, their tax accountant was looking for something else. He had remembered the heartwarming story.
"Whatever came of that book donation?" said Linda Fischer, the widow of Jim Fischer.
He asked Jim Fischer's widow if she had received an 8283 form. She had no clue what that was so she called the library.
'"It's up to you to do that, it's up to you to do your appraisals, and we don't give exact dollar amounts,'" Linda Fischer recalled being told.
The 8283 form is required for all non-cash charitable donations over $500.
"(It's a form) detailing who received the gift, what the gift was and how you arrived at the valuation on your return," explained Matt Komprood, a Grand Forks tax accountant who did not work on the Fischer's return.
He said nonprofits, like the library, are not required to issue receipts for donation.
"The person who is making the donation is responsible to negotiate with the charity while they are making the donation and say, 'I need a letter. I need a valuation,'" Komprood said.
Appraisals are recommended for large donations like the one Jim Fischer made.
"It was kind of a panic," Linda Fischer said.
She ended up playing it safe and estimated the collection at more than $6,000. Since the library wasn't selling them but using them for its own mission, the Fischers could have received face value for the books if they had the proper paperwork. Still, the safe number is a risk without the proper tax form.
"The IRS may ask for it. If they ask for it and you can't produce it, then you will lose that donation," Komprood said.
Linda Fischer's accountant told her not to be surprised if she got audited.
She recalled him saying, "'We will see in the next few years.'"