You can usually deduct charitable contributions you make to qualified organizations, but the amount you can claim may be limited based on the type of donation and your adjusted gross income (AGI).
Before calculating any charitable contribution limits, make sure you've entered all of your cash and non-cash donations in the appropriate sections of your tax return.
When Do Charitable Contribution Limits Apply?
Your deduction may be limited if any of the following situations apply:
- The amount you can deduct may be limited based on the type of contribution, the organization receiving the donation, and your adjusted gross income (AGI). For example, cash contributions to most public charities are generally limited to 60% of AGI, while donations of appreciated property may be subject to lower limits.
- Your donations of capital gain property, such as appreciated stock, real estate, or other assets that increased in value, exceed 30% of your AGI.
- You donated property that increased in value before the gift was made.
- You donated the use of property rather than the property itself.
- Your total charitable contribution deduction exceeds the percentage of AGI allowed under IRS rules.
These limits can be complex because different types of donations are subject to different percentage limits and ordering rules.
How to Determine Whether a Limit Applies
To find out whether your contributions may be affected by a charitable contribution limitation, compare the value of your donations to your adjusted gross income (AGI). Your AGI is shown on your tax return and is used by the IRS to determine many tax benefits and deduction limits.
For example, large donations of appreciated stock or real estate may be subject to different limits than cash gifts.
Where Can I Find More Information?
If you think one of these limitations applies to your situation, review IRS Publication 526, Charitable Contributions. The publication explains:
- AGI percentage limitations
- Cash contribution rules
- Rules for donated property
- Carryover rules for contributions you can't deduct this year
- Special rules for appreciated assets
The publication includes worksheets and examples that can help you determine how much of your charitable contribution is deductible on your return.
What Happens If My Deduction Is Limited?
If your deductible amount is reduced because of an AGI limitation, you may be able to carry the unused portion forward to future tax years, subject to IRS rules. Keeping detailed records of your donations can help you claim any allowable carryover deductions later.
Tip: If you've made large charitable donations, especially non-cash gifts such as stock, real estate, or other appreciated property, review the IRS guidance carefully to ensure you're claiming the correct deduction.
See IRS Publication 526, Charitable Contributions for more information.