Good morning, all.
This discussion was of interest to me. I've been meaning to reply but time got away from me. In the responses, I did not see this issue raised of this being inventory donated by the manufacture and how that affects the valuation. My understanding has always been in these instances that the valuation is the manufacturers cost. It's up to them to determine their deductible amount but I am curious what others are recording for fundraising valuation.
Would you give the donor full invoice value credit in your system for fundraising tracking? Or, do you request substantiation of cost to manufacture. Full retail would definitely be easier as determining manufacturers cost is not always easy. I believe IRS documentation (Publication 561) says: "FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift" which seems to me to be just backing into manufacturing cost.
Many thanks,
John Smilde
Director of Gifts and Records Administration
Advancement and Alumni Relations
George Mason University
4400 University Drive, MSN 1A3
Fairfax, VA 22030
703.993.8680
jsmilde@gmu.edu
This electronic message contains confidential information which is, in whole or in part,
subject to exclusion from disclosure under the Freedom of Information Act pursuant to
§2.2-3705.4.7. of the Code of Virginia.
Original Message:
Sent: 12/5/2024 3:57:00 PM
From: Amy Phillips
Subject: RE: In Kind Gifts Donated by the Manufacturer
Good afternoon, Mark -
There are plenty of situations in which you might receive in kind goods where the donor(s) have no interest in a tax write-off so - as John noted - it is simplest to let them complete a form if they need one and your organization simply signs in the appropriate boxes
When it comes to valuation of goods as in the scenario you noted, I find it simplest to ask the donor to create an invoice for what they otherwise would have billed for the items and make a notation along the lines of "payment waived" and submit that as supporting documentation. By doing that you are getting a document your Finance colleagues are likely to appreciate even up to having an itemized list of things they might wish to asset-tag.
Good luck and best regards,
Founding, Charter and Active member of https://www.advserv.org/. Click or tap to follow the link." rel="noopener noreferrer" data-linkindex="6" data-auth="Verified" style="color: #C724B1; margin: 0">AASP!
Original Message:
Sent: 12/5/2024 2:40:00 PM
From: John Taylor
Subject: RE: In Kind Gifts Donated by the Manufacturer
Mark, we should not "request" donors complete any IRS form, including the 8283. It is strictly between the donor and the IRS to determine whether and when to file that form.
It is also up to them to determine if an appraisal is necessary. If they wish to claim a deduction, they would submit an 8283 to you only then. Honestly, many corporations will donate inventory and write it off as a depreciated asset and not claim any gift.
You need only record a gift at the FMV of the donated equipment and issue a receipt that describes-but does not valuer-the donation. The rest is up to them.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
2604 Sevier Street
Durham, NC 27705
919.816.5903 (cell/text)
Serving the Advancement Community Since 1987
Original Message:
Sent: 12/5/2024 2:25:00 PM
From: Mark Daley
Subject: In Kind Gifts Donated by the Manufacturer
A corporation donated some specialty theatre lighting equipment to our organization through a donation program they run. I requested they complete IRS 8283 with an appraisal, since the claimed value was over $5k. The guidelines in IRS pub 526 and 561 get pretty complicated around "new inventory", but I didn't see any indication of an exemption from the need for an appraisal. But now the corporation has come back to us saying they don't need an appraisal since they manufacture the equipment being donated. That doesn't make any sense to me, but admittedly this is a pretty esoteric situation. Anyone have any experience with this?
------------------------------
Mark Daley
Purchase College Foundation
mark.daley@purchase.edu
------------------------------