FundSvcs Community

I would have booked the house at it's FMV (most current appraisal) when you assumed ownership. If you subsequently sold the house for less than that, the difference would be recorded as a "loss" on your financial records but that would not change your gift records. If you did not have a qualified appraisal at the time and only the donor's word, I would record the house at the value estimated by the realtor - which in this case happens to also be the sales price. But the date of gift (for internal purposes) would still be the date you took ownership. John John H. Taylor Principal John H. Taylor Consulting, LLC 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Fri, Sep 6, 2019 at 12:06 PM Strong, Lorie (Hoover) < lstrong@email.usn.org> wrote: > Good afternoon! > > This might end up being a very simple question/answer, but on our end it > feels complicated - so please forgive me in advance for sending such a long > question on a Friday afternoon. > > A couple of years ago, an alumnus in another state reached out with the > intention of leaving his entire estate to us, including his home and all > its contents. He gave us a copy of his will and signed a gift agreement > directing us to use these assets to create an endowed faculty chair > honoring his father. The total assets to be given were well in excess of > the amount required to fund a faculty chair. > > The donor had created a revocable transfer on death deed for the house. > The materials we received stated the tax assessment value of the house and > land at $350,000. > > He passed away in January, at which point everything transferred into our > name. > > The realtor recommended by the executor suggested listing the house at > $319K and its contents at $16K based on the market in that area and we did > so in May. The house sold at list price last month and we received around > $290K after fees & concessions. The buyers purchased the contents of the > house for $2,500 and sent us a check separately. > > At the time the donor shared his intentions, we did not book any value for > the house because the deed was revocable. We have never received a gift > like this before and have really been struggling with how we were supposed > to record and report on it. Some options we've discussed: > > 1 - Record the house and its contents at the time of the donor's passing > when they came into our possession. If so, would it have been the $350K > assessment he shared with us or the $319K for the house and $16K for its > contents that the appraiser gave us later? > > 2 - Record nothing until the house sold, at which point both the $290K > received and the $2,500 for the contents are recorded as outright cash > gifts. > > 3 - Something else? > > How might this be handled on the accounting end? Restricted asset? > Unrestricted asset? Does it matter that the house sold in a different year > than it was received? What if we had sold it last year? Next year? > > I'd be so grateful for any guidance you all can provide on this. It's a > learning process for all of us. > > Have a great weekend! > Lorie > > > > -- > Lorie Hoover Strong > Development Services Coordinator > University School of Nashville > lstrong@usn.org > >

Good afternoon! This might end up being a very simple question/answer, but on our end it feels complicated - so please forgive me in advance for sending such a long question on a Friday afternoon. A couple of years ago, an alumnus in another state reached out with the intention of leaving his entire estate to us, including his home and all its contents. He gave us a copy of his will and signed a gift agreement directing us to use these assets to create an endowed faculty chair honoring his father. The total assets to be given were well in excess of the amount required to fund a faculty chair. The donor had created a revocable transfer on death deed for the house. The materials we received stated the tax assessment value of the house and land at $350,000. He passed away in January, at which point everything transferred into our name. The realtor recommended by the executor suggested listing the house at $319K and its contents at $16K based on the market in that area and we did so in May. The house sold at list price last month and we received around $290K after fees & concessions. The buyers purchased the contents of the house for $2,500 and sent us a check separately. At the time the donor shared his intentions, we did not book any value for the house because the deed was revocable. We have never received a gift like this before and have really been struggling with how we were supposed to record and report on it. Some options we've discussed: 1 - Record the house and its contents at the time of the donor's passing when they came into our possession. If so, would it have been the $350K assessment he shared with us or the $319K for the house and $16K for its contents that the appraiser gave us later? 2 - Record nothing until the house sold, at which point both the $290K received and the $2,500 for the contents are recorded as outright cash gifts. 3 - Something else? How might this be handled on the accounting end? Restricted asset? Unrestricted asset? Does it matter that the house sold in a different year than it was received? What if we had sold it last year? Next year? I'd be so grateful for any guidance you all can provide on this. It's a learning process for all of us. Have a great weekend! Lorie -- Lorie Hoover Strong Development Services Coordinator University School of Nashville lstrong@usn.org

The gift timing is when you took possession of the property, because the will was revocable. At the moment you receive the gift, ie get clear title to the property, you record a gift. The value of the gift is the assessed value of the house - ideally by an independent expert. The subsequent sale price is what the house is worth today, not what it was worth when it was gifted. The gain or loss in house value doesn't impact the gift. You relied on the tax assessment for the house value. In some jurisdictions, these are notoriously off-base to actual values, while in others the locality is on top of things and those assessments are reasonable, if not perfectly predictive of sale price. Here it was 10% off, which doesn't seem egregious one way or the other. Thank you, Isaac Shalev CRM Expert Sage70, Inc. (917) 859-0151 isaac@sage70.com Schedule a *30-minute consultation *now: https://calendly.com/sage70/30min On Fri, Sep 6, 2019 at 3:06 PM Strong, Lorie (Hoover) <lstrong@email.usn.org> wrote: > Good afternoon! > > This might end up being a very simple question/answer, but on our end it > feels complicated - so please forgive me in advance for sending such a long > question on a Friday afternoon. > > A couple of years ago, an alumnus in another state reached out with the > intention of leaving his entire estate to us, including his home and all > its contents. He gave us a copy of his will and signed a gift agreement > directing us to use these assets to create an endowed faculty chair > honoring his father. The total assets to be given were well in excess of > the amount required to fund a faculty chair. > > The donor had created a revocable transfer on death deed for the house. > The materials we received stated the tax assessment value of the house and > land at $350,000. > > He passed away in January, at which point everything transferred into our > name. > > The realtor recommended by the executor suggested listing the house at > $319K and its contents at $16K based on the market in that area and we did > so in May. The house sold at list price last month and we received around > $290K after fees & concessions. The buyers purchased the contents of the > house for $2,500 and sent us a check separately. > > At the time the donor shared his intentions, we did not book any value for > the house because the deed was revocable. We have never received a gift > like this before and have really been struggling with how we were supposed > to record and report on it. Some options we've discussed: > > 1 - Record the house and its contents at the time of the donor's passing > when they came into our possession. If so, would it have been the $350K > assessment he shared with us or the $319K for the house and $16K for its > contents that the appraiser gave us later? > > 2 - Record nothing until the house sold, at which point both the $290K > received and the $2,500 for the contents are recorded as outright cash > gifts. > > 3 - Something else? > > How might this be handled on the accounting end? Restricted asset? > Unrestricted asset? Does it matter that the house sold in a different year > than it was received? What if we had sold it last year? Next year? > > I'd be so grateful for any guidance you all can provide on this. It's a > learning process for all of us. > > Have a great weekend! > Lorie > > > > -- > Lorie Hoover Strong > Development Services Coordinator > University School of Nashville > lstrong@usn.org > >