Tax Deductibility of Designated Gifts

The Internal Revenue Service recognizes the worthiness of donating to charity by allowing you to deduct charitable gifts if you itemize deductions on your taxes. The charity must be a qualifying organization, such as a church, school, or any charity registered under 501c3 of the Internal Revenue Code. Individuals, no matter how worthy, don't qualify as charities under the IRS definition. If you designate a contribution to go to a particular individual, you can't deduct it from your taxes.

Designating Gifts

While you clearly can't deduct money you give to a homeless individual on the street, you might try to funnel money to that specific individual by donating to your church's homeless charity. If you donate to your church's general fund and the trustees of the fund give some of the money to the homeless, you're in the clear. You didn't designate what your money would be used for. But if you write a check to the church and designate that the money must go to a specific homeless individual, the Internal Revenue Service says you can't deduct that donation from your taxes. Even though the money passed through the church, a qualified organization, you designated it for an individual, so no deduction applies.

Definition of a Gift

The IRS allows deduction of gifts to charitable organizations. By their definition, a gift is money or something else of value that is freely given, with no strings attached. If you designate how the money is to be used, that takes away the "no strings" aspect and disqualifies you from donating. That doesn't mean that you can't give to a fund that has a specific purpose. For instance, if you donate to your fraternal organization's hurricane relief fund, the IRS says that's a deductible donation. But if you donate to the fund and stipulate that the money is specifically to help your old roommate who suffered storm damage, you've put a stipulation on the donation and lost your deduction.

Record Keeping

When you make a charitable donation, you should retain a record of that donation. Ask for a receipt or other acknowledgement from the charity. If you donate more than $250 in property or cash, the charity is supposed to give you a written acknowledgment, but many charities provide a receipt for a donation of any size. A canceled check or credit card receipt will also serve as a record. Be careful of any notations you make in the memo section of the check; don't write that your donation is for a specific individual or the IRS will consider this a designated gift.

Other Considerations

If you want to know whether the IRS considers a legitimate charity the organization to which you've donated, visit the IRS' website and search for the Exempt Organizations Select Check. Put in the name of the charity and the location, if you know it, and you'll learn if donations to the organization qualify as tax deductions.The site lists all charities that meet IRS rules for tax-deductible contributions.

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About the Author

Cynthia Myers is the author of numerous novels and her nonfiction work has appeared in publications ranging from "Historic Traveler" to "Texas Highways" to "Medical Practice Management." She has a degree in economics from Sam Houston State University.

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