Planned Giving
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Gifts of Real Estate | Gifts-in-kind
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Gifts-in-kind
Covered in this section:
1 Gifts of equipment and material
2 Acceptance policy
3 Appraisal guidelines
4 Tax deduction issues
From donations of artwork to corporate contributions of equipment and materials, gifts-in-kind ensure that educational efforts at The San Diego Council on Literacy remains state-of-the-art. Gifts-in-kind are gifts of real property such as land, or tangible personal property such as equipment, materials, company products, or inventory.
Gifts of equipment and material
The San Diego Council on Literacy encourages and appreciates gifts-in-kind, such as computer hardware and software, industry equipment and other materials that The Council would otherwise need to purchase. Through gifts-in-kind, supporters help The Council strengthen programs and improve facilities to provide the best possible educational experience to children, adults and families. Unlike contributions of cash or securities, in-kind gifts allow donors to receive the benefit of a charitable contribution without drawing on their cash reserves.
Acceptance policy
All gifts-in-kind are reviewed, accepted, and officially acknowledged. Prior to acceptance, the gift is reviewed to see if it meets specific needs. The San Diego Council on Literacy reserves the right to decline any gift that does not further The Council's goals or involves special maintenance or other conditions The Council would be unable to satisfy. The donor is responsible for making arrangements to deliver the gift.
Appraisal guidelines
In accordance with Internal Revenue Service regulations, the donor is responsible for determining the value of an accepted gift. Before presenting a gift of tangible property to The San Diego Council on Literacy, donors should first establish the fair market value of the gift with a recognized independent appraiser. A qualified appraisal dated no more than 60 days prior to the date of contribution is required by the IRS to substantiate a donor's charitable deduction for gifts-in-kind. The San Diego Council on Literacy personnel are not qualified appraisers, and federal regulations do not permit The Council to give appraisals or estimates of value.
Tax deduction issues
Generally, the fair market value of a gift-in-kind is deductible.
A donation within a tax year valued at $250 or more requires a written acknowledgment from the recipient. Accordingly, The San Diego Council on Literacy will mail you the required receipt.
If the value of a gift is $500 or more, the Internal Revenue Service requires donors to file IRS Form 8283 and comply with its regulations pertaining to non-cash charitable contributions. If the donation is valued at more than $5,000, the donor must obtain a qualified appraisal and submit an appraisal summary with the return claiming the deduction. A copy of the appraisal must also be given to The San Diego Council on Literacy. For tax purposes, the date of the gift is the date of physical delivery. For companies that contribute products, the deduction is limited to the actual cost of producing the item when the donor is the creator of a contributed tangible asset.
The Council's use of a gift may affect the amount of an allowable deduction. If the use is unrelated to The Council's tax-exempt purpose or function, the donor must reduce the contribution deduction by the amount of long-term capital gain he or she would have realized from sale of the property. Special rules apply to gifts of inventory, works of art, gifts of assets with short-term capital gain, and some other hard-to-value assets. The summary above is based on Internal Revenue Service publications and provides basic guidelines regarding tax deductions for gifts-in-kind. This summary is not intended to serve as a complete account of the requirements or limitations covering tax-deductible gifts. The San Diego Council on Literacy recommends that donors consult their tax advisors when considering gifts-in-kind.