Recognizing the excess purchase price of selling the church property as a donation/contribution from the purchaser

by Kenneth

We sold our church for an amount significantly higher than the market value. The purchaser's attorney says the excess payment can be treated as a donation/contribution to the church.

A deposit was received in 2016. The Treasurer provided acknowledgement of the deposit as a gift and also noting the donor did not receive any goods or services in exchange for their donation.

I recently took over the Treasurer position and it's time to prepare the annual contribution statements. The purchaser of our church will be expecting such an acknowledgement for the balance of the excess purchase price paid in 2017.

The county's auditor valuation was used to determine market value. I'm pretty sure our church did not consult with a Tax Attorney.

I don't feel very confident that this would be an allowable tax deduction and have concerns about providing an acknowledgement letter.

Any comments are much appreciated.

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Church Accounting FAQs.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

Share this page:
Enjoy this page? Please pay it forward. Here's how...

Would you prefer to share this page with others by linking to it?

  1. Click on the HTML link code below.
  2. Copy and paste it, adding a note of your own, into your blog, a Web page, forums, a blog comment, your Facebook account, or anywhere that someone would find this page valuable.