Oregon donors have options for year-end contributions.

Byline: Susan Palmer The Register-Guard

CORRECTION (ran 12/28/2006): An article on charitable donations on Page F1 in Wednesday's Register-Guard failed to note that a gift to Oregon's cultural nonprofit groups must be accompanied by a matching gift to the Oregon Culture Trust in order to qualify taxpayers for a state tax credit. The tax credit would equal the sum of the two gifts. For more information visit www.culturaltrust.org.

As the year ticks toward its final moments, the money question looms: What can I give away that will help keep my income tax bill down?

For well-heeled taxpayers, there is a helpful new IRS option. And Oregon has made it easy to support the state's cultural heritage and legacy with a straight-forward tax credit.

But at the low-end of the donor scale, the IRS is tightening its rules, with tougher standards or more paperwork for those giving household items or small amounts of money.

First the good news: Those over 70 with individual retirement accounts known as IRAs can now directly transfer up to $100,000 per year from their IRA accounts to a charity without having to pay taxes on the money. The option is available to taxpayers even if they don't itemize their deductions.

In Oregon, donors can receive a state income tax credit, up to $500 for individuals or $1,000 for couples filing jointly who give to one of Oregon's 1,200 cultural nonprofit groups.

Donations to local organizations as diverse as the Asian American Foundation of Oregon, The WOW Hall, the Downtown Initiative for the Visual Arts, even the City Club of Eugene qualify. The state lists the groups on a Web site.

Unlike donations itemized on federal tax returns which reduce the amount of income on which taxes are levied, the state offers a tax credit on the cultural donations that dollar for dollar decreases the final tax bill.

But donors eyeing that busted-down sofa as a donation that will concurrently help bring down their taxes are out of luck.

The IRS now requires donated items to be "in good used condition or better," in order to be claimed as a deduction.

And those donating money in amounts less than $250 now must have a bank statement or a letter from the charity confirming the amount of the donation.

No IRS staff members willing to discuss the changes on the record were available on Wednesday.

But an IRS news release says that clothing and household goods donations must be in "good used condition or better" in order to be tax deductible. Donors must have a receipt from the charity to support the donation.

When it comes to gifts of money, the old rule on cash donations totaling under $250 merely required that the taxpayer keep a personal written record of the donations, such as a personal bank register or diary entry.

Now, taxpayers need a bank statement or a letter from a charity confirming their donations, the same requirements that had been in place for amounts totalling greater than $250.

Taxpayers don't have to send the documentation with their tax returns to the IRS, but rather must simply keep it with their tax records in the event they are audited, according to the agency Web site.

The new rules haven't had much of an impact at Goodwill Industries of Lane and South Coast Counties, said agency spokeswoman Rufina Saiz.

Goodwill for many years has sent donors letters acknowledging receipt of all cash contributions, she said.

And she doesn't expect the household goods rule to change the caliber of donated goods because Goodwill has always set conditions on the quality of used items it accepts.

"A good rule of thumb in determining if it's suitable is whether or not you would give it to a friend or relative," she said. "If the answer is, yes, then we would like it."

Like many charities, ShelterCare in Eugene, which provides housing for the homeless, is seeing the typical end-of-year rush of donations, said Executive Director Susan Ban.

"December is always the heaviest month," she said. "We all have the intention to tithe, to use the old-fashioned term, but then, here it is the end of the year and what have we really done?" she said.

Traditional tithing involves giving 10 percent of one's income to church.

In 2004, the most recent year for which IRS records are available, 558,147 Oregon taxpayers - about a third of the 1.6 million who filed a tax return - itemized charitable contributions. Those contributions totalled $1.8 billion, or about $3,300 per donating taxpayer.

TAX LAW CHANGES IRS: See changes to charitable giving rules at www.irs.gov/newsroom/article/0,,id=164997,00 .html Oregon: Groups on the state's Cultural Trust list can be found at www .culturaltrust.org/ programs/beneficiaries_ qualifying_non_profits.php