For donations of property, (non-cash), it is the donor’s responsibility to determine fair market value of the
property donated. The organization is not required to estimate or to make any determination of fair market
value of the property donated. The organization is only responsible for acknowledging the receipt of the
donated property. For donations of property with a fair market value of $5,000.00 or more the organization
is required to acknowledge receipt of the donation by signing Part IV of Form 8283, Non-cash Charitable
Contributions (copy attached). This acknowledgement does not represent any acquiesce as to the fair market
value of the donated property, only an acknowledgement of its receipt from the donor.
In general, if with two years of receiving donated property with a fair market value of more than $5000, an
organization sells, exchanges or otherwise disposes of the donated property, the organization is required to
file Form 8282, Donee Information Return, with the Internal Revenue Service. Since the organization is not
responsible for determining the fair market value of donated property when received from the donor, for the
purposes of determining whether to file Form 8282, a reasonable valuation of the donated property is
advised. If the organization anticipates selling or disposing of the donated property within two years, it is
advisable to obtain the donor’s taxpayer identification number at the time the property is received in order to
complete Form 8282.
For the purposes of acknowledging the receipt of property donations, the term “property” does
not
include
services (I.R.C. section 1.170A-1(g)). As a general rule, for a “donation” to be considered a charitable
contribution, the donated property must have some cost basis in the hands of the donor. Donations such as
coupons for services or discounts on services or goods have no such cost basis in the hands of the donor and
therefore do not qualify as a charitable contribution and should not be acknowledged as such (Rev. Rul. 79-
431, 1979-2 CB 108).
There may be instances where the organization may provide some benefit to the donor for a donation of cash
or property. For example, suppose the organization auctions two tickets to a football game, each with a face
value of $10, total value of $20. In this example the tickets are auctioned for $100 each, a total auction price
of $200. The charitable donation for the donor is $180 ($200 less $20). If the organization provides a
benefit to a donor as part of the receipt of more than $75 of value in cash or property from the donor, the
organization should provide a receipt letter as follows.
BENEFITS PROVIDED (PAYMENT OF $75.01 OR MORE)
(Donor Name)
(Donor Address, if known)
Thank you for your contribution of $___________ in cash and/or [ Describe Property ] on [ Date ].
We estimate the fair market value of the benefits we provided to you consideration for this donation was
$___________. We are a I.R.C. section 501(c)(3) organization and you may claim a donation deduction for
the difference between the cash and/or property given to the organization and the value of the benefits you
received. The organization assumes no responsibility for determining the fair market value of the donated
property.
( Organization’s Name)
Authorized Signature