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The low cost exception only comes into play if the donor makes a MINIMUM gift of $55.50. Under that the 2% rule must be followed. In other words, these stoles at that donation point require a QPQ receipt and reduction based on the stole FMV. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Fri, Mar 22, 2019 at 3:55 PM Anna Wilk < 0000000db8c39c8e-dmarc-request@listserv.fundsvcs.org> wrote: > I wanted to ask the group about this. We are asking our senior students > to give a class gift and if they donate $15 or more they would receive a > stole they could wear at graduation. The cost of a stole is less than > $10. Would this item be viewed as a "low cost" item by the IRS so we don't > have to report the cost of goods or services received for this donation? > Below is what I found. > > Thanks in advance! > Anna Simons > > > > *Gift Deductibility Disclosure Thresholds for 2019* > In addition to the requirements for documenting cash contributions > described above, *when a charity provides a good or service in exchange > for a donation of more than $75,* the charity must provide a written > disclosure to the donor setting out the fair market value of the goods and > services received, and informing the donor that only the portion of the > contribution that exceeds this fair market value is tax deductible. > > The disclosure requirement does not apply to "low-cost" goods or services > or those that have "insubstantial value" as defined by the IRS. The > monetary value assigned to these definitions is indexed annually to > inflation. For calendar year 2018, these "low-cost articles" are those > whose fair market value is not more than 2% of the payment or $111, > whichever is less; or if the payment is at least $55.50 and the only items > received are token items such as mugs, calendars, etc., bearing the > organization's name or logo. These token items are deemed to be low-cost > articles if their cost (not their fair-market value) does not exceed > $11.10, in the aggregate, for all items received by the donor during that > year. > > For more information about the gift substantiation rules, see IRS > Publication 1771 at www.irs.gov/pub/irs-pdf/p1771.pdf (Acrobat Reader > required) or contact the Center. The IRS' announcement of the 2019 dollar > values can be found in Rev. Proc. 2018-57, available on the IRS website at > https://www.irs.gov/pub/irs-drop/rp-18-57.pdf . > >

I wanted to ask the group about this.  We are asking our senior students to give a class gift and if they donate $15 or more they would receive a stole they could wear at graduation.  The cost of a stole is less than $10.  Would this item be viewed as a "low cost" item by the IRS so we don't have to report the cost of goods or services received for this donation?Below is what I found.  Thanks in advance!Anna Simons   Gift Deductibility Disclosure Thresholds for 2019 In addition to the requirements for documentingcash contributions described above, whena charity provides a good or service in exchange for a donation of more than$75, the charity must provide a written disclosure to thedonor setting out the fair market value of the goods and services received, andinforming the donor that only the portion of the contribution that exceeds thisfair market value is tax deductible. The disclosure requirement does not apply to "low-cost"goods or services or those that have "insubstantial value" as definedby the IRS. The monetary value assigned to these definitions is indexedannually to inflation. For calendar year 2018, these "low-costarticles" are those whose fair market value is not more than 2% of thepayment or $111, whichever is less; or if the payment is at least $55.50 andthe only items received are token items such as mugs, calendars, etc., bearingthe organization's name or logo. These token items are deemed to be low-costarticles if their cost (not their fair-market value) does not exceed $11.10, inthe aggregate, for all items received by the donor during that year. For more information about the gift substantiation rules, see IRSPublication 1771 at www.irs.gov/pub/irs-pdf/p1771.pdf (AcrobatReader required) or contact the Center. The IRS' announcement of the 2019dollar values can be found in Rev. Proc. 2018-57, available on the IRS websiteat https://www.irs.gov/pub/irs-drop/rp-18-57.pdf .