Charities described in section 501(c)(3) of the Internal Revenue Code need funds to operate their charitable, educational, or other tax-exempt programs. These charities may choose from a number of fundraising activities for financial support. A popular fundraising program is the sale of donated property. Charities may also use donated property in their tax-exempt programs.
The following are the filing requirements of charities that receive charitable contributions of donated property. Charities may be required to file–
- Annual exempt organization returns, and
- Returns required to substantiate charitable contributions of donated property.
For more information, see Additional Resources on Donated Property for Charitable Organizations .
If an organization receives charitable deduction property and within 3 years sells, exchanges, or disposes of the property, the organization must file Form 8282, Donee Information Return. However, an organization is not required to file Form 8282 if:
- The property is valued at $500 or less, or
- The property is distributed for charitable purposes.
Form 8282 must be filed within 125 days after the disposition. A copy of Form 8282 must be given to the previous donor. If the organization fails to file the required information return, penalties may apply.
Charitable Deduction Property
This is any property (other than money or publicly traded securities) for which the donee organization signed an appraisal summary or Form 8283,Noncash Charitable Contributions.
Publicly Traded Securities
These are securities for which market quotations are readily available on an established securities market as of the date of the contribution.
If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property (other than money or publicly traded securities). The donee organization is not a qualified appraiser for the purpose of valuing the donated property. For more information, getPublication 561, Determining the Value of Donated Property.
For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. The person who signs for the donee must be an official authorized to sign the donee’s tax or information returns, or a person specifically authorized to sign by that official. The signature does not represent concurrence in the appraised value of the contributed property. A signed acknowledgment represents receipt of the property described on Form 8283 on the date specified on the form. The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. A copy of Form 8283 must be given to the donee.
- Publication 1771, Charitable Contributions: Substantiation and Disclosure Requirements
- Publication 4302, A Charity’s Guide to Vehicle Donations
Charitable Organizations – Substantiating Noncash Contributions
A charity may need to provide additional substantiation with respect to noncash contributions. (NOTE: Special rules apply to certain contributions of motor vehicles.)
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.