by Jeanne
Question regarding noncash donations.
Sometimes people purchase things for our church - classroom supplies, food for church events, etc. and turn the receipts in to me and ask that I include them on their annual contribution statement.
Do each of these types of donations have to be substantiated by the church in order for them to claim them as a donation on their tax returns?
When it's a large item, like a donation of equipment, car or similar thing, we give them a statement describing the item but don't put a value on it.
But how should it be handled when it's just for small things and they turn in the actual receipt showing what they paid for it? Is it necessary for me to list each item that they purchased?
Thanks so much for your help!
4Comments
non-cash donation acctg entry
AAnonymous
I understand giving a contribution receipt to someone who donates food/class supplies etc. I use QuickBooks for our accounting. What entry would I record for this transaction? If it was an asset that we would keep I would DR-asset and CR-income (non-cash donation). But in the case of something that will be used up (consumed) I'm not sure of the entry. Thank you for your help.
How to record noncash contribution on church books?
AAnonymous
How to record noncash contribution on church books? example: A church member donated 1 set of computer with printer?
Donated Supplies
WWanda
I have the same situation at times in my church;however;I still don't understand the answer to this question. In the last part of the answer you stated if someone donates supplies to be used by everyone in the church then you should honor this but you did not make it clear how? I also get receipts showing how much they spent on the "supplies" and they asked to have it added to their contribution statements; however; I am not completely sure how to record this....could you please clarify this further?? Thank you!
(Vickey's Reply)
A wonderful CPA in Alabama answered this question for me and as it is tax season, I will try to clarify his statement for you.
I believe he was talking about if a donor donated a noncash contribution to the church such as paper, pencils, crayons, etc. for the church to use for all classes, then you could issue them a noncash contribution receipt. Usually, your organization is not responsible for establishing the value of the non-cash items and should not include any value on the receipt.
See this page for an example of a noncash contribution receipt.
He said personally he wouldn't issue receipts for supplies individuals stated they used in their personal classes as it is hard to verify. That is not saying you can't...just that he recommends not doing it.
(Vickey's Reply)
A wonderful CPA in Alabama answered this question for me and as it is tax season, I will try to clarify his statement for you.
I believe he was talking about if a donor donated a noncash contribution to the church such as paper, pencils, crayons, etc. for the church to use for all classes, then you could issue them a noncash contribution receipt. Usually, your organization is not responsible for establishing the value of the non-cash items and should not include any value on the receipt.
See this page for an example of a noncash contribution receipt.
He said personally he wouldn't issue receipts for supplies individuals stated they used in their personal classes as it is hard to verify. That is not saying you can't...just that he recommends not doing it.
Non Cash Donation Acknowledgment
VVickey
In regards to giving a church receipt for noncash donation of supplies, I contacted a CPA, who specializes in nonprofit accounting regarding your question and this was his reply:
In response to this question, it is my opinion that the church should not get into "documenting" donated supplies, etc by Sunday School teachers or other workers.
(1) For one thing, they have no way of verifying the donation. The receipt brought in verifies the amount, but typically the church Sec/Treas wasn't in the classroom, so doesn't know what items were actually provided. What happened to the leftover items?
(2) There is no requirement that I know of for the church to verify this - in an audit, the taxpayer would simply show the receipts, and explain the purpose.
(3) The time required to verify and track each teacher's contributions of goods would be cumbersome.
They are correct to verify large items donated to the church - they are placed into the control of the church, and not consumed.
IF someone brings supplies for the use of all teachers, and gives them to the office for distribution, I think the church SHOULD acknowledge that contribution - noting the description, etc.
Thank you Greg
[Church Accounting Package]
www.freechurchaccounting.com
In response to this question, it is my opinion that the church should not get into "documenting" donated supplies, etc by Sunday School teachers or other workers.
(1) For one thing, they have no way of verifying the donation. The receipt brought in verifies the amount, but typically the church Sec/Treas wasn't in the classroom, so doesn't know what items were actually provided. What happened to the leftover items?
(2) There is no requirement that I know of for the church to verify this - in an audit, the taxpayer would simply show the receipts, and explain the purpose.
(3) The time required to verify and track each teacher's contributions of goods would be cumbersome.
They are correct to verify large items donated to the church - they are placed into the control of the church, and not consumed.
IF someone brings supplies for the use of all teachers, and gives them to the office for distribution, I think the church SHOULD acknowledge that contribution - noting the description, etc.
Thank you Greg
[Church Accounting Package]
www.freechurchaccounting.com