What type of records should donors maintain for tax purposes?

Maintaining accurate records is crucial for donors to properly substantiate their claims related to gifts for tax purposes. The chosen response highlights the importance of keeping comprehensive documentation, which includes records of all gifts made, valuation appraisals for non-cash gifts, and relevant tax returns.

Maintaining records of gifts ensures that donors can prove the amount and type of gifts given. Valuation appraisals are essential, especially for gifts of property or assets that need to be accurately assessed to determine their fair market value at the time of the gift, as this value affects the amount of the gift for tax purposes. Tax returns provide a historical reference and should include previously filed gift tax returns, showing how gifts were reported and any taxes that may have been owed or paid.

This thorough record-keeping not only helps in substantiating gift tax deductions but also prepares donors for any potential audits by the tax authorities. Proper documentation is a proactive approach to ensure compliance with tax regulations and to facilitate accurate financial reporting.