Practical Advice on Development and Related Regulations

Barry N. Chait, Esq.

July 13, 2011

Rules of the Game

Questions on Form 9901. Does the organization have a gift

acceptance policy that requires the review of any non-standard contributions?

2. Did the organization receive more than $25,000 in non-cash contributions? If yes, complete Schedule M.

Rules of the Game, cont.

Questions on Form 990, cont.3. Did the organization receive a

payment in excess of $75 made partly as a contribution and partly for goods and services provided to the payor? If yes, did the organization notify the donor of the value of the goods or services provided?

Rules of the Game, cont.

Questions on Form 990, cont.4. Did the organization sell, exchange or

otherwise dispose of tangible personal property for which it was required to file Form 8282?

Rules of the Game, cont.

Quid pro-quo

Rules of the Game, cont.

Quid pro-quo, cont.

Latin: “What for what” or something for something.

The concept of getting something of value in return for giving something of value.

Rules of the Game, cont.

Quid pro-quo, cont.

Organizations that receive quid pro-quo contributions exceeding $75 (regardless of the deductible amount) must provide a written statement to the donor stating that the contribution deduction is limited to the excess of the contribution over the value of the goods or services rendered.

Rules of the Game, cont.

Fundraising or Gaming ActivitiesAll organizations that report over $15,000 in fundraising activities or report more than $15,000 of gross receiptsMust list the top ten compensated individuals who are paid over $5,000 for fundraisingThose organizations that receive more than $15,000 have to report revenue, cash and non-cash prizes and direct expenses

Donor Rules

Substantiating Contributions

A donor will not be allowed any deduction for a contribution by cash, check or any other method regardless of the amount unless the donor retains either

1) a bank record that supports the donations or

2) a written receipt or communication from the charity showing the name of the organization, date and amount of the contribution

Donor Rules, cont.

Cash Contributions

Donors must also get a written acknowledgement from the charity if the value of the contribution is $250 or more. A canceled check or other reliable record is not sufficient proof.

Acknowledgement must be obtained no later than the due date (or extended due date) of the donor’s tax return for the year the contribution was made.

Misconceptions

Donor donates time and gives presentation to a non-profit to help its charitable mission.

What is the deductible contribution?

Donor donates a baseball card collection to his or her favorite charity to auction off at their yearly auction.

What is the deductible contribution?

Donor donates a baseball card collection to the Baseball Hall of Fame in Cooperstown.

What is the deductible contribution?

Donor purchases a raffle ticket for $100 with the potential to win an antique car.

Deductible or non-deductible?

Barry Chait donates an opportunity to golf with him at the Country Club.Charitable Organization auctions this opportunity off at their annual gala. They list the value as priceless (!).What is the deductible amount of the contribution?