What is Charitable Contribution Deduction?
Definition The charitable contribution deduction lets taxpayers who itemize deduct donations of cash or property to qualified organizations. Deductions are limited to a percentage of adjusted gross income that varies by gift type and recipient, and larger gifts require specific documentation or appraisals. Donations of appreciated assets can avoid capital gains tax while generating a deduction.
Strategies like bunching several years of gifts into one year or donating appreciated stock can turn generosity into a larger tax benefit for clients who itemize.