A Donor Who Contributes Property Valued at More than $5,000 to a Church Could Be Selected for Examination by the IRS If No Form 8282 is Filed by the Church

Donors who make contributions of noncash property valued at more than $500 to churches (or

Donors who make contributions of noncash property valued at more than $500 to churches (or other charities) must attach a Form 8283 to their federal income tax return (Form 1040) on which the charitable contribution deduction is claimed.

In addition, if the claimed charitable contribution deduction is for more than $5,000, the donor must obtain a "qualified appraisal" and complete the appraisal summary portion of the Form 8283. A church must file a Form 8282 (donee information return) with the IRS and with the donor if it sells or otherwise disposes of donated property valued by the donor at more than $5,000 within two years of the date of the contribution.

A new provision in the Internal Revenue Manual (section 4175.2) states that the tax return of any donor who contributes property valued at more than $5,000 to a church should be selected for examination by the IRS if no Form 8282 is filed by the church.

Obviously, it is now more important than ever for churches to comply with this important reporting obligation. If your church receives donated property that may have a fair market value in excess of $5,000, be sure to apprise the donor of the qualified appraisal requirement and the need to attach a qualified appraisal summary (Form 8283) to the tax return on which the deduction is claimed.

Then, if the church sells or in any manner disposes of the donated property within two years of the date of contribution, be certain that a Form 8282 is submitted to the IRS (within 90 days of the disposition) and a copy is provided to the donor. This will reduce the likelihood that the donor's tax return will be selected for examination by the IRS. For a complete discussion of these requirements, see Chapter 5 of Richard Hammar's Church & Clergy Tax Guide.

Source: CLTR, Marc/April 1988

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