The CPA Desk

A Thought Leader Production by PKFTexas

Tax Deductible Contributions in Not-for-Profits

Jen:  This is the PKF Texas Entrepreneur’s Playbook.  I’m Jen Lemanski, this week’s guest host, and I’m back again with Annjeanette Yglesias, one of our tax managers on our not for profit team.  Welcome back to the Playbook Annjeanette.

Annjeanette:  Thanks Jen, it’s nice to be here.

Jen:  So we’ve been talking the past few weeks about not for profits, it’s my understanding that 501C3 charitable organizations can receive tax deductible contributions.  Is that correct?

Annjeanette:  Yes, that’s correct.  501C3 organizations can receive charitable donations that are deductible by the donor.

Jen:  Okay, and do they have to do anything special to document those deductions or how does that work?

Annjeanette:  Yes actually.  When a charity receives a donation from a donor they’re required to provide a written disclosure statement.

Jen:  Does it have to include something special on it?

Annjeanette:  Basically the written disclosure statement has to provide the total amount of the payment that the donor made but also if the donor received any goods or services in connection with that donation the value of the goods and services also has to be stated on the disclosure statement.

Jen:  Now are there different brackets for the amount that someone gave?  Say somebody gave $10.00 versus somebody giving $1 million; are there different levels of documentation that someone has to have?

Annjeanette:  The requirement for the I.R.S. is any contribution over $75.

Jen:  Okay, perfect.  So that goes for both individuals giving donations, they have to make sure that they receive that documentation and then the not for profit has to make sure that they give that documentation.

Annjeannette:  That’s correct and the reason why it’s important for the donor is because the deductible amount of that payment that the donor makes to the organization is limited to the excess of the payment over the fair market value that’s stated on the disclosure.

Jen:  So that’s something they really need to pay attention to, probably gets you in the door to talk to them about.

Annjeanette:  Exactly.

Jen:  Awesome.  Well thank you so much for being here, we really appreciate it and we’ll get you back to talk about some of this stuff again.

Annjeanette:  Great.

Jen:  To learn more about how PKF Texas can help your not for profit visit PKFTexas.com/notforprofit.  This has been anther Thought Leader production brought to you by PKF Texas The Entrepreneur’s Playbook.