IRS Raises Cost Amounts of Thank-You Gifts That Can Be Disregarded for Charitable Deduction

If you've read Nolo's nonprofit books, you know that when thanking donors for gifts to your nonprofit, theres no need to subtract out the value of "token" items like a tote bag, coffee cup, or stickers from the value of the donation, as long as they bear your organization's name or logo. Nor do you have to subtract the cost of items you give to donors that are low-cost in comparison to the overall donation.

According to the IRS's 2011 inflation adjustments, token goods or services must now cost your organization no more than $9.70, and the contribution received must have been at least $48.50. (And again, the items must have your organization's name or logo on them.)

Regarding the exception for low-cost items, low cost items must now either have a fair market value of $97 or less, or be worth 2% or less of the donors payment, whichever is less.

The above token and low-cost limits apply to calendar year 2011; these are regularly adjusted.