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Gift-in-Kind Policy
DEFINITION
A Gift-In-Kind is a voluntary contribution of goods or services
that can be used to advance the mission of the Courtney Owens
Educational Foundation, Inc., (COEFI) or can be readily converted
to cash and may qualify as a charitable deduction for the person(s)
making the gift.
Note: Contributed services cannot be counted as a gift
and do not qualify as a charitable tax deduction to the donor.
However, a donor of services may be able to deduct expenses
incurred while performing said services. In such cases, the
donor should be advised to consult with a tax accountant.
PURPOSE
The IRS has specific regulations regarding gifts-in-kind. This
policy outlines the process a staff member of COEFI should follow
when presented with a gift-in-kind. It limits the liability that
may inadvertently be assumed by placing value on gifts or by accepting
a gift that does not advance the mission of COEFI or cannot be
readily converted to cash. It further assures that a donor will
receive timely acknowledgement of his/her contribution.
POLICY
The Courtney Owens Educational Foundation, Inc., may accept contributions
of goods or services that can be used to advance the mission of
COEFI or may be converted readily into cash. When accepting a
gift-in-kind, the receiver must ask the donor to complete a COEFI
Gift-In-Kind form. Once the donor has completed the form, the
receiver must sign the form and send it immediately to COEFI for
processing.
The IRS allows an individual to deduct the full fair market value
of a donated item if it is kept by COEFI and used for one of its
tax-exempt purposes. If the item is to be converted to cash, then
the donor may claim a deduction of the cost value or the fair
market value, whichever is less. It is the sole responsibility
of the donor to determine the value of a contributed item; the
receiver cannot assign a value to the donated item(s).
COEFI will enter the contribution in its donor database and issue
an acknowledgement to the donor along with a copy of the Gift-In-Kind
form. The acknowledgement will contain only a description of the
contribution and will not include a statement as to the value
of the contribution. It will further contain a statement as to
what, if any, goods or services were given in exchange for the
contribution. COEFI cannot issue an acknowledgement for contributions
that cannot be used or readily converted to cash. Examples might
include broken or outdated computer equipment, opened office supplies,
etc.
For gifts with values exceeding $5,000, the donor must complete
all parts of IRS form 8283 and submit the form to COEFI for signature.
The Chief of Operations is the only individual authorized to sign
8283 forms.
If COEFI has signed an IRS form 8283 and then sells, exchanges
or otherwise transfers the gift within two years from the date
of gift, the Foundation must file a donee information return,
IRS form 8282, within 125 days of disposing the property. COEFI
will advise the donor if such a transaction occurs as it may affect
the charitable tax deduction for which they qualify.
PROCEDURE
- When presented with a potential gift-in-kind, an individual
must assess if the gift can be used to advance the mission of
COEFI or could be readily converted to cash. If there is any
question as to whether the contribution meets either of these
criteria, the individual should contact the Mrs. Muzetta Thrower,
COEFI Chairman of the Board.
- If the gift is accepted, the individual should offer an immediate
and sincere expression of gratitude. At that time, the donor
should be given a Gift-In-Kind form and be encouraged to complete
the form at that time. If the donor is unable or unwilling to
complete the form, the receiver may complete the form, write
"N/A" as the estimated fair market value, and enter
that he or she completed the form in the note section in the
lower right hand corner.
- The individual accepting the gift cannot offer tax advice
or dictate the value of the contribution. It is the responsibility
of the donor to determine the fair market value of the contribution.
The value is for COEFI internal gift reporting only; the donor's
receipt and/or acknowledgement will not indicate value in any
way that could be construed as an endorsement of its value.
- If the item is personal property of the donor and is valued
at more than $5,000, the donor must obtain a certified appraisal.
The appraisal cannot be dated more than 60 days from the date
of the donation. It must be prepared, signed and dated by a
qualified appraiser. Federal law requires that the donor pay
for the appraisal. (The cost of the appraisal is also tax deductible).
This value will be used for gift reporting purposes only.
What constitutes a qualified appraisal:
I. Appraiser must hold himself or herself out to the public as
an appraiser and state credentials showing that he or she is qualified
to appraise the type of property being valued.
II. Appraiser must value the property no more than 60 days before
the date of gift; it can be done after the Courtney Owens Educational
Foundation has accepted the gift.
III. Appraiser cannot be (1) the donor, (2) the donee , (3) any
party to the transaction, (4) an appraiser used regularly by (1),
(2) or (3), or anyone related to (1),(2), or (3).
The appraisal must contain the following information:
- A description of the item
- It's physical condition
- The date (or expected date) of the contribution
- Name, address and tax ID number of the appraiser
- Qualifications of the appraiser including his/her background,
experience and education
- A statement that the appraisal was prepared for income tax
purposes
- Date the item was valued
- Appraised fair market value of the item
- Method of valuation (income approach; market data approach;
replacement cost minus depreciation approach.)
- Appraiser must complete Part IV of Section B on form 8283
- The individual accepting the gift will sign and date the Gift-In-Kind
form only after the donor has irrevocably turned over the gift-in-kind.
- Once signed, the form should be turned over to COEFI immediately
for processing and acknowledgement.
- COEFI will notify the Accounting Department of the contribution
and assign it as an asset or income to the appropriate company
and/or department.
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