The giving of items other than cash is unique and therefore most non-cash gifting should be completed only after consulting a tax professional. However, it is important for the church treasurer to understand the basic rules of non-cash gifts so that he or she can at least provide basic guidance to the donor. If a donor’s total deduction for all non-cash contributions is more than $500, the donor must fill out Section A of IRS Form 8283.
If the donor makes a contribution of non-cash property worth more than $5,000, generally an appraisal must be done. In that case, the donor must also fill out Section B of Form 8283. Form 8283 is attached to the donor’s tax return. For any non-cash contribution of $250 or more, the donor can claim a deduction only if the church treasurer provides written acknowledgement on behalf of the church. If the church is given a non-cash gift of any size the treasurer should review IRS Publication 526 to assure that he or she has complied with the applicable rules and regulations concerning the acceptance of such gifts.
Documentation of Non-Cash Gifts
The treasurer should be aware of the following documentation rules concerning non-cash gifts:
Value of Each Gifted Item is between $0 and $250 – The donor should log the details concerning the gift to validate the contribution. The donor should note the date, list of items, estimated value of the item in its present condition, and the name and address of the church that received the item. The church treasurer should acknowledge in writing the non-cash contribution.
Value of Each Gifted Item is between $250 and$500 – The donor should obtain a receipt from the church that confirms the date, items and value based on either the utility use by the church or the amount that the church believes they can receive from the sale of the item. The church should acknowledge the receipt of the items in writing – but should not set a monetary value on the items given unless a clear market value is known or can be determined.
The treasurer should remember that churches are not appraisers. If non-cash gifts are given, the church or the donor should secure a qualified appraiser to determine the value of the item before credit is given.
Value of Each Gifted Item is between $500 and $5,000 – The donor must file an IRS Form 8283, completing Section A, as an attachment to his tax return. The form should be prepared at the time of the gift by the donor’s tax professional. The church receiving the item must confirm the receipt and value of the gift. Again, the church should acknowledge the receipt of the items in writing – but should not set a monetary value on the items given unless a clear market value is known or can be determined.
Value of Each Gifted Item is $5,000 or over – The donor must file an IRS Form 8283, also completing Section B, as an attachment to his tax return and have an appraiser sign the form to validate the value of the gift. The church treasurer is also required to acknowledge receipt of the donation by signing Form 8283. The donor’s tax professional will prepare and attach this document to the donor’s tax return.
Additional information on non-cash gifts should be obtained by contacting the church’s local accountant before accepting such from the donor.