Donor-Gift Rules Are Adjusted to Reflect Inflation

The IRS has announced its annual changes affecting charitable deductions when charities provide low-cost gifts, often called premiums, to donors.

Federal law allows donors to take charitable deductions only for the portions of their contributions that are outright gifts.

The IRS said that a charity could tell a donor that gifts are fully deductible in 2010 if:

• The donor gave $48 or more and received a premium worth $9.60 or less. In 2009 those figures were $47.50 and $9.50.
• The donor received premiums with a fair market value equal to no more than 2 percent of the amount of the donation, or $96, whichever was less. In 2009 the figure was $95.
• The donor received appeals that contained small items—such as mailing labels—worth a total of no more than $9.60. The amount last year was $9.50.