What is a Gift Deduction?

A gift deduction is a tax deduction that can be taken for donations made to charitable organizations. In order to legally deduct such a gift, it must be given to a charitable, non-profit organization. Gifts to family and friends or any other individuals would not be subject to the gift deduction. For most people, in any given year, the gift deduction will likely not make much of a difference on taxes. However, for those who have given a large gift, such as a vehicle, to a charity, the deduction could be significant. Closely related to the gift deduction is the charitable contribution, which some may consider a cash gift. However, the difference is the value of a cash donation is more easily determined. To get the gift deduction for a larger item, such as a vehicle, boat or airplane, the Internal Revenue Service (IRS), requires you to attach Form 1098-C. This form gives the IRS the information they need in order to make sure the deduction is in order and not an attempt at fraud. The ...  more