Q: Our church maintains an account with a financial brokerage firm to facilitate donations of stock or other equities without liquidating them first. Could gifts of stock be considered “noncash” donations?
Yes, gifts of stock are considered contributions of noncash property. However, specific rules and documentation requirements apply to these types of donations.
Special Considerations for Stock Donations
When a donor contributes publicly traded stock to a church or charity, several important steps must be followed:
1. Documenting the Donation
The donor must report the stock donation on Part A of IRS Form 8283. This form is used to document noncash contributions and must be completed accurately to support a charitable deduction.
2. Substantiating the Gift
The donor must obtain proper acknowledgment from the receiving church or charity. This acknowledgment must include:
- A description of the donated stock.
- The date of the contribution.
- A statement indicating whether the donor received goods or services in exchange for the gift.
It is important to note that Form 8283 alone is not sufficient substantiation for noncash contributions valued at $250 or more, including stock.
Additional Guidance for Churches and Donors
For stock donations, both the donor and the recipient church must ensure compliance with IRS rules to avoid potential tax issues. Churches are encouraged to provide donors with timely and accurate acknowledgments to help them claim the appropriate charitable deduction.
For more detailed guidance, consult a qualified CPA or refer to Chapter 3 of Church Finance for comprehensive information on handling noncash contributions.
For additional details on noncash contributions, visit the IRS Charitable Contributions page or review nonprofit financial guidelines from the Evangelical Council for Financial Accountability.
FAQ: Is Stock Considered a Noncash Contribution?
- Is stock always considered a noncash contribution?
Yes, donations of stock are classified as noncash contributions under IRS guidelines. - What forms are required for stock donations?
Donors must complete Part A of IRS Form 8283 for publicly traded stock contributions. - What substantiation is needed for stock donations?
Donors must obtain a written acknowledgment from the church, detailing the stock gift and its conditions. - Are there additional resources for handling stock donations?
Yes, consult a CPA or refer to Church Finance for detailed guidance on managing noncash contributions.
