Donating to cancer research increases the odds of finding a cure and often decreases your tax liability. The Internal Revenue Service recognizes multiple American cancer research organizations as qualified charities, so your donations count for the charitable giving deduction. The more you give, the more likely you are to benefit from the donation on your tax return.
Donations to cancer research follow the same rules as any other charitable donations. If you give cash, your deduction equals your donation. For donations of property, you start with the fair market value. However, unless you've held the property for a year or less, you're generally limited to your basis. For example, if you buy stock for $25, watch it double the next day and then donate it, you can only claim a $25 donation. But, if you held it for over a year, and its now worth $50, you could deduct the full $50. In addition, if the property is worth less than you paid for it, you're stuck donating just the lower value.
The deduction limit for cancer research depends on whether you're donating to a public charity or a private foundation. For public charities, your deduction can't exceed 50 percent of your adjusted gross income. If you're donating property that's increased in value, the limit is only 30 percent. For example, you might want to donate stock that's gone up in value because then you get a double tax benefit: You don't have to deduct the value or pay taxes on the gain. For private foundations, the limits are 30 percent in general and 20 percent for property that's appreciated. If you gave more than you're allowed to deduct, you can carry over the excess for up to five years.
Determining Charitable Status
The IRS keeps an online database of charitable organizations that lists the status of each charity, including cancer research charities. You can search the database by name. For example, the IRS classifies the American Cancer Research Foundation in San Antonio, Texas, and Center for Cancer Prevention Research Inc., in New York, New York, as private foundations. On the other hand, IRS categorizes the American Cancer Research Center and Foundation in Oakland, California as a public charity.
You have to follow the same rules as any other charitable donation to claim cancer donations. Report the cash donations on line 16 and the property donations on line 17 of Schedule A. Though you don't have to attach a receipt to the tax return, you do have to keep it in case the IRS audits your return. If you gave less than $250 in cash, you can use a bank statement or canceled check; otherwise you need an actual receipt from the charity. If any of your property is worth more than $500, you've got some extra paperwork: Form 8283.
Just because the organization does cancer research doesn't mean you can give it money for a tax deduction. For example, for-profit pharmaceutical research companies undertake their own research efforts; you can't deduct contributions to them. You also can't claim a deduction if you give money to an individual to pay for cancer treatments.
Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."