Recording and Acknowledging a Noncash Donation

by Brent Givens
(Indianapolis, IN)

Regarding a noncash contribution: We were blessed to have someone gift our church a building for our church. The building was appraised at $360,000.
We need to do a few things;
1. Show the building as an asset...what is that transaction?
2. Issue a letter to the donor...is there a form that should be attached?

Thank you!

Answer

Regarding acknowledging a noncash donation:

For contributions of property (other than money and publicly traded securities) with a reported value over $5,000, the DONOR must obtain a qualified appraisal and attach an appraisal summary to their income tax return on which the deduction is claimed.

The appraisal summary must be on Form 8283, signed and dated by the church and the appraiser, and attached to the donor’s return on which the deduction is claimed. The signature by the church does not represent agreement in the appraised value of the contributed property.

Remember...it the DONOR’s responsibility to file an IRS Form 8283, if required. Your church is under no responsibility to insure the donor files this form or that is accurately completed.

However, advising donors of their responsibility and providing them with the form along with your non cash contribution statement, it a courtesy most churches provide.

This and more information is covered in my Church Contributions: Handling and Acknowledging Church Contributions ebook.

Regarding recording your asset, I am going to check with a CPA that specializes in nonprofit accounting to ensure that it is recorded properly.

I will post his comment as soon as I receive it.

Hope this helps,



Church Accounting Package

www.freechurchaccounting.com