I donated clothes, books, furniture, and household items to charity across three years — why did Virginia allow some of my deductions and deny others?

Plain-English summary

A couple claimed noncash charitable contribution itemized deductions on their Virginia resident returns for 2020, 2021, and 2022, tracking their federal Schedule A filings. Under audit, the Department requested documentation to support those deductions; the couple submitted some records, but the auditor found them insufficient for most categories and assessed additional tax. On appeal, this ruling lays out Virginia's (federally conformed) substantiation requirements in unusual detail, sorting the couple's donations — clothing and accessories, books, miscellaneous household items, furniture, luggage, everyday kitchenware, and toys — into three tiers by dollar value, each with its own documentation standard.

Tier 1 — $500 and under: a simple receipt is enough, and it worked here. For property valued at or under $500, a taxpayer generally needs only a donee receipt showing the donee's name and address, the date and place of the contribution, and a reasonably detailed description of the property (contributions over $250 in this tier also need written acknowledgment of any goods or services received in return). For 2020, the couple's furniture, luggage, and toy categories fell in this tier; for 2021 and 2022, their books, furniture, and kitchenware categories did. The couple's receipts for these categories met the requirement — the Department reinstated these deductions.

Tier 2 — over $500 but under $5,000: needs a Form 8283, and the couple didn't have one. This tier requires, on top of the basic receipt, a written record of how and approximately when the property was acquired and its cost basis, AND a completed federal Form 8283 (Noncash Charitable Contributions) attached to the return. The couple's household-items category (all three years) and their books category (2020 only) fell into this tier — and based on the Department's electronic filing records, the couple hadn't filed a complete Form 8283 for any of the three years. Those deductions were denied.

Tier 3 — over $5,000: needs a qualified appraisal, and the couple didn't have one either. Property valued above $5,000 generally requires a qualified appraisal with an appraisal summary attached to the return. The couple's clothing and accessories donations exceeded $5,000 in each of 2020, 2021, and 2022 (similar items are combined across the whole year and across donees to determine whether a category crosses a threshold, per IRC § 170(f)(11)(F)) — but they submitted no appraisals. Those deductions, too, were denied.

A local-government statute that didn't apply. The couple separately cited Va. Code § 15.2-953 in support of their appeal — but that statute simply authorizes LOCALITIES (counties, cities) to make their own donations to charitable organizations. It has nothing to do with an individual taxpayer's substantiation burden for a personal charitable deduction, and the Department didn't consider it further.

Result: a genuine partial win. Because Va. Code § 58.1-205 makes an assessment presumptively correct, with the burden on the taxpayer to disprove it, the couple's failure to meet the Tier 2 and Tier 3 requirements meant those deductions stayed denied — but their properly substantiated Tier 1 (under-$500) categories were reinstated, and the case was returned to audit staff to recompute a lower, revised assessment reflecting those reinstated deductions.

What this means for you

Anyone donating used goods across several categories in one year

Match your paperwork to the RIGHT tier for each category's total value, not just for each item. Small, low-value donations often only need a decent receipt — but once a category's total value for the year crosses $500, you need a Form 8283; cross $5,000, and you need a qualified appraisal, with no partial credit if you're missing either.

If you're not sure which tier a donation category falls into

Add up ALL similar items donated during the year, to ANY number of different charities, before assuming you're under a threshold. A handful of $200 donations of the same type of item, spread across different charities, can still add up to more than $500 (or even $5,000) for tier purposes.

Accountants and tax professionals

This ruling is a useful reference for laying out Virginia's full three-tier substantiation ladder in one place, alongside the companion doctrine (seen in other Virginia rulings on this same issue) that failing a tier's requirement denies the deduction in full rather than stepping down to a lower tier. Here, though, the couple's LOWEST tier categories were genuinely substantiated and were reinstated — it's not always an all-or-nothing outcome across an entire return, just within each value tier.

Common questions

Q: What documentation do I need for a $300 clothing donation?
A: A donee receipt with the donee's name/address, the date and place of the contribution, and a description of the property — plus, since it's over $250, a written acknowledgment of any goods or services you received in return.

Q: What if my donation category is worth $2,000 for the year?
A: You need the Tier 1 receipt requirements PLUS a written record of how and when you acquired the property, its cost basis, and a completed federal Form 8283 attached to your return.

Q: What if a category is worth $8,000 for the year?
A: You generally need a qualified appraisal with an appraisal summary attached to your return, on top of the lower tiers' requirements.

Q: Why didn't the couple's Va. Code § 15.2-953 argument work?
A: That statute addresses a LOCALITY's power to donate to charities — it has nothing to do with an individual's own charitable-deduction substantiation requirements.

Citations and references

Statutes and regulations:

• Va. Code § 58.1-301 — Virginia's conformity to IRC terminology
• Va. Code § 58.1-219 — Department's authority to adjust FAGI/itemized deductions inconsistent with the IRC
• Va. Code § 58.1-322.03 1 — itemized deduction conformity, including charitable contributions
• Va. Code § 58.1-310 — Department's authority to require federal return and supporting documents
• Va. Code § 58.1-205 — assessment is prima facie correct; burden on the taxpayer
• Treas. Reg. § 1.170A-13(b)(1) — receipt requirements for gifts $500 and under
• Treas. Reg. § 1.170A-13(b)(3) — additional requirements (including Form 8283) for gifts over $500
• Treas. Reg. § 1.170A-13(c)(2) — qualified appraisal requirement for gifts over $5,000
• IRC § 170(f)(11)(F) — similar items of property aggregated across donees

Cases and prior rulings the Department relied on (described here, not linked): Kunkel v. Commissioner, T.C. Memo 2015-71; Bass v. Commissioner, T.C. Memo 2023-41 (aggregating similar donated property); P.D. 19-78 (7/29/2019) and P.D. 23-24 (3/1/2023) (basic substantiation requirement for charitable deductions).

Source

• Landing page: Virginia Laws, Rules & Decisions
• Ruling: P.D. 25-6

Original ruling text

January 15, 2025

Re: § 58.1-1821 Application: Individual Income Tax

Dear *:

This will reply to your letter in which you seek correction of the individual income tax assessments issued to * (the “Taxpayers”) for the taxable years ended December 31, 2020, through 2022.

FACTS

The Taxpayers filed Virginia resident income tax returns for the taxable years at issue, claiming noncash charitable contributions as itemized deductions reportable on federal Schedule A. Under audit, the Department requested documentation to support the deductions. The Taxpayers submitted some documentation, but the auditor determined it was insufficient to support the claimed deductions and issued assessments. The Taxpayers submitted an application for correction, asserting that they provided sufficient documentation. The Taxpayers also cited Virginia Code § 15.2-953 in support of their application.

DETERMINATION

Conformity

Virginia Code § 58.1-301 provides, with certain exceptions, that terminology and references used in Title 58.1 of the Code of Virginia will have the same meaning as provided in the Internal Revenue Code (IRC), unless a different meaning is clearly required. Conformity does not extend to terms, concepts, or principles not specifically provided in the Code of Virginia . For individual income tax purposes, Virginia conforms to federal law, in that it starts the computation of Virginia taxable income with federal adjusted gross income (FAGI). Income properly included in the FAGI of a Virginia resident is subject to taxation by Virginia, unless it is specifically exempt as a Virginia modification pursuant to Chapter 3 of Title 58.1 of the Code of Virginia .

Generally, the Department relies on the accuracy of information and computations reflected on the federal income tax return when reviewing Virginia individual income tax returns. If the information provided on the federal return looks reasonable, there is generally no reason to look behind those computations. The Department, however, retains the authority to adjust the FAGI and itemized deductions where there is clear evidence that the amounts reported on the federal or Virginia income tax return are inconsistent with the IRC. See Virginia Code § 58.1-219.

Itemized Deductions

Virginia Code § 58.1-322.03 1 allows taxpayers to deduct from their Virginia adjusted gross income certain amounts allowed for itemized deductions for federal income tax purposes. These deductions include those for real estate taxes, home mortgage interest, personal property taxes, medical expenses, and charitable contributions, provided they are claimed in accordance with the IRC and its related regulations.

The Department requested that the Taxpayers provide documentation supporting the noncash charitable contribution deductions claimed on their Schedules A for the 2020 through 2022 taxable years. The request clearly indicated the documentation required to substantiate the deductions. Deductions for charitable contributions are allowable only when they can be substantiated through items such as receipts or cancelled checks. See Public Document (P.D.) 19-78 (7/29/2019) and P.D. 23-24 (3/1/2023).

Under IRS regulations, the substantiation requirements for gifts of property other than money vary depending on the amount of the deduction claimed. The regulations set up three tiers of deductions, for amounts up to and including $500, greater than $500 but less than $5,000, and greater than $5,000, and require greater substantiation for each tier. See Treas. Reg. § 1.170A-13. For purposes of determining the applicable threshold values, property and all similar items of property donated to one or more donees during the year are treated as one property. See IRC § 170(f)(11)(F). See also Kunkel v. Comm’r , T.C. Memo 2015-71, and Bass v. Comm’r , T.C. Memo 2023-41.

“Similar items of property” is defined as “property of the same generic category or type, such as clothing, jewelry, furniture, electronic equipment, household appliances, or kitchenware.” See Treas. Reg. § 1.170A-13(c)(7)(iii). For example, if a taxpayer made three separate donations of furniture valued at $2,000 each, the rules applicable to donations greater than $5,000 would apply because the total value of furniture donated during the year exceeded $5,000. In this case, using the information provided by the Taxpayer during the audit and additional information the Taxpayers provided on appeal, the audit staff separated the Taxpayers’ contributions into categories for clothing and accessories, books, miscellaneous household items, furniture, luggage, everyday kitchenware, and toys.

Gifts of Property Valued at $500 and Under

Under Treas. Reg. § 1.170A-13(b)(1), for items valued below $500, a taxpayer generally need only have a receipt from the donee containing the name and address of the donee, the date and place of the contribution, and a reasonably detailed description of the property donated. Any contribution in this category over $250 must also have a contemporaneous written acknowledgment from the donee indicating whether any goods or services were provided by the donee in connection with the contribution, and if so, what the value of those goods or services were. See Treas. Reg. § 1.170A-13(f)(2).

For taxable year 2020, each of the furniture, luggage, and toy categories of the Taxpayers’ contributions were valued at $500 and under. For taxable years 2021 and 2022, the books, furniture, and everyday kitchenware categories were valued at $500 and under. For these contributions, the Taxpayers submitted documentation consisting of a receipt, date of the contribution, and a description of the property. These receipts appear to have been provided to the Taxpayers at the same time as the contributions, and they indicate that no goods or services were provided by the donee in connection with the contributions. Accordingly, the Department will treat these receipts as acceptable substantiation for those categories of property indicated above that were valued at $500 or less.

Gifts of Property Valued Over $500

Treas. Reg. § 1.170A-13(b)(3) provides that in addition to the receipt required by Treas. Reg. § 1.170A-13(b)(1), the donation of noncash property with a value between $500 and $5,000 necessitates a written record of the manner and approximate date of acquisition and the cost basis. In addition, taxpayers must complete and attach one or more federal Forms 8283, Noncash Charitable Contributions, to their federal income tax return for each taxable year in which they make a noncash charitable contribution in excess of $500.

For each of the taxable years at issue, the Taxpayers’ household items required this level of substantiation. In addition, the Taxpayers’ books also required this level of substantiation for the 2020 taxable year. For each of these categories, the Taxpayers failed to submit documentation satisfying the substantiation requirements at this tier. In addition, based on the Department’s electronic filing records, it does not appear that the Taxpayers filed complete Forms 8283 for any of the taxable years at issue. As such, the deductions claimed for contributions of noncash property valued over $500 were properly denied.

Gifts of Property Valued Over $5,000

Under Treas. Reg. § 1.170A-13(c)(2), if a taxpayer claims a deduction for property valued in excess of $5,000, the taxpayer generally must obtain a qualified appraisal and attach an appraisal summary to their return.

In each of the 2020, 2021, and 2022 taxable years, the Taxpayers contributed clothing and accessories valued over $5,000. However, the Taxpayers did not submit any qualified appraisals or appraisal summaries with their returns. Accordingly, the deductions claimed for contributions of these items of property were properly denied.

Virginia Code § 15.2-953

The Taxpayers cited Virginia Code § 15.2-953 in support of their application for correction. This section of the Code of Virginia establishes the power of localities to donate to charitable institutions and associations. It is not relevant to the determination of whether an individual taxpayer has substantiated their donations and has not been considered on appeal.

CONCLUSION

Taxpayers must maintain records sufficient to allow the IRS to determine their correct tax liability. See Treas. Reg. § 1.6001-1(a). Similarly, Virginia Code § 58.1-310 provides:

Whenever in the opinion of the Department it is necessary to examine the federal income returns or any copy thereof of any individual, estate, trust, partnership, or corporation in order properly to audit such returns, the Department or the commissioner shall have the right to require such taxpayer to provide such return or a copy thereof and all statements, inventories, and schedules in support thereof.

Under the provisions of Virginia Code § 58.1-205, in any proceeding relating to the interpretation of the tax laws of Virginia, an “assessment of a tax by the Department shall be deemed prima facie correct.” As such, the burden of proof is on the Taxpayers to show that the assessment was erroneous. In this case, with the exception of a few categories of property valued at $500 or less, the Taxpayers did not provide sufficient documentation to support the deductions claimed for charitable contributions.

Accordingly, the case will be returned to the audit staff to reinstate the deductions for the categories of property identified above that were valued at less than $500 and revise the assessments accordingly. The allowable deductions are indicated on the enclosed schedule. The Taxpayers will receive updated bills that will include accrued interest to date. The Taxpayers should remit the balance due within 30 days of the bill dates to avoid the accrual of additional interest and possible collection actions.

The Code of Virginia sections cited are available online at law.lis.virginia.gov. The public documents cited are available at tax.virginia.gov in the Laws, Rules, & Decisions section of the Department’s website. If you have any questions regarding this determination, you may contact * in the Office of Tax Policy and Legal Affairs, Tax Adjudication and Resolution Division, at or **.

Sincerely,

James J. Alex

Tax Commissioner

Commonwealth of Virginia

AR/4961.Q

Related Documents

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