Nonprofits will not always receive gifts in the form of cash. Non-cash gifts, such as computer equipment or office supplies, can be just as useful. Yet even these gifts still have cash value.
That’s right, even non-cash gifts are income, at least they are in the eyes of the Internal Revenue Service (IRS). Depending on the cash value of these gifts, a nonprofit might be required to substantiate them to the IRS.
In their book “Conducting a Successful Major Gifts and Planned Giving Program,” Kent E. Dove, Alan M. Spears, and Thomas W. Herbert, explained that the need to file federal Form 8283 with the IRS depends on the status of the taxpayer and the size and type of the gift. They explained four instances that qualify, as well as which part of the form must be completed:
- Non-cash gifts valued at $500 or less. The donor only has to complete federal Form 8283 for this type of gift if the person has made a series of gifts in a given year, each of which is valued at $500 or less but with a total value exceeding $500;
- Non-cash gifts valued between $501 and $5,000. Gifts in this range must be reported on Part A of IRS Form 8283, which is then attached to the donor’s federal income tax return;
- Non-cash gifts valued at more than $5,000. If the amount claimed as a charitable income tax deduction is in excess of this amount, the IRS requires the donor to complete Part B of Form 8283; and,
- Gifts of non-publicly traded stock. If the donor makes this type of gift, Part B of Form 8283 must be completed. This is true regardless of the value of the stock. A qualified appraisal is required if the value of the stock exceeds $10,000.