HANDLING NONCASH DONATIONS
Richard R. Hammar
July 1, 1988
Copyright 1987 Church Law & Tax Report. Adapted with permission. Christians give substantially to their churches out of gratitude to God and obedience to his commands. Such giving to God's work is, in itself, a reward. But an income tax deduction doesn't hurt. Contrary to popular belief, charitable contributions to churches and other tax-exempt organizations are not automatically deductible. The benefit of a tax deduction comes only when donors satisfy certain conditions. The conditions? One is that the donor be able to substantiate the contribution by maintaining records demonstrating that a contribution was in fact made and giving the amount or value of the contribution. The substantiation requirements, however, vary depending on the nature of the contribution, and donor and recipient have different responsibilities. Donations of money offer few problems: churches merely receipt all donations, giving the donors a reliable record for tax purposes. But noncash gifts, because of their nebulous value, present greater difficulties. So let's consider two categories of noncash gifts: property worth less than $5,000, and property worth more than $5,000. Contributions valued under $5,000
Substantiation requirements for contributions of noncash property such as land, equipment, stock, books, art, or vehicles are stringent. Tax regulations require a receipt from the church showing the name of the church, the date and location of the contribution, and a detailed description of the property. In addition, the church may specify on its receipt the value of the donated property. Church officers, however, are under no obligation to appraise donated property. But the church is free to list the value of the property as determined by the donor. In ...
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