A couple was denied a deduction for noncash property given to the Salvation Army because they failed to substantiate the market value of the donated property. The only evidence offered to substantiate the contribution was a receipt from the Salvation Army that did not describe the property or state its value, and that cautioned that the Salvation Army was not an appraiser and accordingly could not be expected to fix a value for donated property.
The Tax Court concluded that such evidence was not adequate to support the deduction. It should be noted that the Salvation Army acted properly in refusing to value the donated property. Churches are not appraisers. When receipting a donor who contributes non- cash property, churches should only identify the donated property, the donor, and the date of contribution. Churches should also advise donors of the special substantiation rules that now apply to contributions of non- cash property valued by the donor at $500 or more. Goldstein v. Commissioner, T.C. Memo. 1987-47.
Source: Church Law & Tax Report March/April 1987.