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September 5, 2013

Q&A: Donated Goods and Charitable Statements

Why the receipt value of a donated good can't go on a donor's contribution statement.

Q: I occasionally have a church member who donates something the church needs. The member then gives me a receipt for the item purchased and asks me to put it on their giving statement. Is this allowed?

A: No, it cannot go on the member's cash contribution receipt because the member did not contribute cash. The member is allowed a noncash deduction for the fair market value of the item.

Instead of this approach, I suggest that the church reimburse the member in cash for the item. If the member chooses to endorse the check back to the church, then the member has made a cash contribution.

For more help with charitable contributions, including donated goods, check out chapter 8 of Richard Hammar's 2013 Church & Clergy Tax Guide.

Frank Sommerville is a shareholder in the law firm of Weycer, Kaplan, Pulaski & Zuber, P.C. in Houston and Dallas, Texas. He received his bachelor's degree in business from Texas Wesleyan University. He received his masters in professional accounting with an emphasis on taxation from the University of Texas at Arlington. His law degree is from the University of Houston Law Center. He holds a license as a Certified Public Accountant. He is also Board Certified in Tax Law by the Texas Board of Legal Specialization. He is rated AV (highest possible) by Martindale-Hubbell Legal Directory.

Frank is an Editorial Advisor for Christianity Today's Church Law & Tax Group.

Related Tags: charitable contributions, donations, donors, giving, receipts, treasurers

Comments

Thanks for this question and answer as I was wondering the same thing. Several people have given me receipts for items they bought for the church such as a lawnmower, lighting fixtures, etc.

Although our bank does not allow me to deposit a check endorsed over to the church. I will have to ask them if it still applies since it is originally a check from the church. They reject checks even made out to our pastor that he endorses over to the church so now we have them make it out to our church instead.

Is it acceptable to give a non-cash giving receipt for only NEW goods or equipment as long as the church retains the sales receipt for the donated goods with a copy of the non-cash giving receipt on file?
Thanks.

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