Background. In last month’s Church Treasurer Alert! we addressed Form 8282, and we learned that churches should file this form if they meet the following requirements: (1) a donor makes a contribution of noncash property to the church that is valued at more than $5,000 (other than publicly traded securities); (2) the donor presented the church with a qualified appraisal summary (Form 8283, Part B) for signature; (3) the church sells, exchanges, consumes, or otherwise disposes of the donated property within two years of the date of contribution; (4) the church did not consume the donated property or distribute it without charge to another organization or individual in furtherance of the church’s tax-exempt purposes.
Last month’s issue assumed that your church received the donated property directly from the original donor, and disposed of it within two years of the date of the contribution. There are two additional situations that need to be addressed—what happens if your church transfers donated property to another church, and what if your church receives donated property not from the original donor but from another church? These two issues will be addressed in turn.
Your church transfers the property to another church. Your church may decide to transfer donated property to another church or charity. This can happen in three ways. First, you sell the property to the other church or charity. Second, you give the property to the other church or charity in a way that does not further your own exempt purposes. Third, you give the property to the other church or charity in a way that does further your exempt purposes. Church treasurers need to be familiar with how the Form 8282 reporting rules apply in each of these cases.
(1) Your church sells the property to another church or charity. Your church will need to file a Form 8282 with the IRS (assuming the conditions summarized above are met). See last month’s newsletter for the details. There are no additional requirements. You do not need to share any information with the other church, and it does not need to file a Form 8282 if it disposes of the property within two years of the original donor’s contribution to your church.
(2) Your church donates the property to another church or charity—not in furtherance of your church’s exempt purposes. In some cases a church receives donated property from the original donor and then gives it to another church or charity in a transaction that does not further its exempt purposes. To illustrate, assume that your church receives a donated car from a member and you give the car to a local charity that is not organized for the same exempt purposes as your church. You are required to file Form 8282 if you donate the car to the other charity within two years of receiving it from the original donor (assuming the conditions summarized above are met). Note that you will complete all of Part 1 (you identify the other charity on lines 2a-2d). In addition, you are required to give the other charity the following information:
- The name, address, and employer identification number of your church. In general, this information must be provided to the successor charity within 15 days after the later of (1) the date you transferred the property, or (2) the date you signed the qualified appraisal summary (Form 8283, Part B).
- A copy of the qualified appraisal summary (the Form 8283 you received from the original donor). In general, this information must be provided to the successor charity within 15 days after the later of (1) the date you transferred the property, or (2) the date you signed the qualified appraisal summary (Form 8283, Part B).
- A copy of the Form 8282 that your church filed with the IRS within 15 days after you file it.
(3) Your church donates the property to another church or charity—in furtherance of your church’s exempt purposes. Your church may receive donated property from the original donor and then give it to another church in furtherance of your exempt purposes. In such a case your church is exempted from the Form 8282 filing requirement (see last month’s article). To illustrate, assume that your church receives a donated car from a member and you give the car to another church that is financially needy. Since this donation directly furthers your religious purposes, your church is not required to file Form 8282. The instructions to Form 8282 specify that “you do not have to file Form 8282 if an item is … distributed, without consideration, in fulfilling your purpose of function as a tax-exempt organization.”
But what about the other church? Is it exempted from the Form 8282 filing requirement? Unfortunately, the tax code, regulations, case law, and instructions to Form 8282 do not address this issue directly. The instructions to Form 8282 simply state that a “successor donee” must file a Form 8282 if it disposes of donated property within two years of the date of the original contribution. But the instructions assume that you gave the other charity a copy of your Form 8282 within 15 days after you filed it with the IRS. The problem is that your church was not required to file a Form 8282 and so there is no form to give the other church and the “15 day” requirement has no meaning.
Until further clarification is provided by the IRS, the best answer is that the other church is subject to the Form 8282 filing requirement if it disposes of the car within two years of the date it was given to your church by the original donor. You should provide the other church with the following information to assist it in complying with this requirement:
- A copy of the qualified appraisal summary (the Form 8283 you received from the original donor).
- An “unofficial” copy of Form 8282. Identify your church at the top of the form and then complete all of Part I and Part III. “Unofficial” means that your church did not file the form with the IRS.
In general, this information should be provided to the successor charity within 15 days after the later of (1) the date you transferred the property, or (2) the date you signed the qualified appraisal summary (Form 8283, Part B).
Your church receives property from another church. What are your reporting obligations if you receive donated property from another church or charity? That will depend on the circumstances. Consider the following:
(1) Your church purchased property donated to another church or charity. Assume that John donated property to First Church, and that First Church sold the property to your church within two years after receiving it from John. First Church would need to file a Form 8282 with the IRS (assuming that the conditions summarized above are met). But your church is not required to file a Form 8282 even it disposes of the property within two years after the date of John’s original gift.
(2) Another church gives donated property to your church, but not in furtherance of its exempt purposes. The other church should file a Form 8282 if it transfers the property to your church within two years of the date it received the donated property (and the other conditions summarized above are met). Your church has the following obligations:
- First, it must file Form 8282 if it disposes of the property within two years of the date it was given to the other church by the original donor. Of course, as noted above, the other church is required to provide you with information that will assist you in complying with the Form 8282 reporting requirement.
- Second, your church should provide the other church with its name, address, and employer identification number within 15 days of the later of the date it received the property or the date it received a copy of the original donor’s qualified appraisal summary (Form 8283, Part B) from the other church.
Tip. If another church donates property to your church, be sure to ask the following questions in order to determine if you will need to file a Form 8282: (1) Was the property donated to your church by the original donor? (2) If so, did the donor ask your church to sign a qualified appraisal summary (Form 8283, Part B)? (3) Did your church donate the property to our church within two years of the date of the original gift? (4) If so, did you file a Form 8282 with the IRS?
(3) Another church gives donated property to your church in furtherance of its exempt purposes. The other church is not required to file a Form 8282. However, as noted above, your church should file a Form 8282 if it disposes of the property within two years of the date it was given by the original donor to the other church.
Tip. Your church is not required to file a Form 8282 unless all of the requirements discussed at the beginning of this article are met. Further, your church is exempt from this requirement if it disposes of the donated property without charge in furtherance of its exempt purposes.
Examples. The following examples will illustrate the main points in this article.
Example. Jill donated a car to First Church on November 1, 1997. She obtained a qualified appraisal (that valued the car at $7,500), and she had the church sign her qualified appraisal summary (Form 8283, Part B). On July 1, 1998, First Church sold the car to Second Church, and on October 1, 1998 Second Church sells the car to a third party. First Church has to file a Form 8282, but Second Church does not.
Example. Same facts as the previous example except that the car was valued at only $3,500 and Jill did not obtain a qualified appraisal. Neither First Church nor Second Church is required to file Form 8282.
Example. John donated a car to First Church on July 1, 1997. He obtained a qualified appraisal (that valued the car at $9,500), and he had the church sign his qualified appraisal summary (Form 8283, Part B). First Church donates the car to Second Church on May 1, 1998, in furtherance of its religious purposes. First Church is not required to file Form 8282. Second Church will have to file a Form 8282 if it disposes of the car within two years of the date John gave it to First Church—unless it does so at no charge in direct furtherance of its exempt purposes. How will Second Church know the date of the original gift? First Church is required to provide Second Church with the following information that will assist Second Church in complying with the Form 8282 reporting requirement: (1) its name, address, and employer identification number, and a copy of John’s qualified appraisal summary, within 15 days after the later of the date it transferred the car to Second Church, or the date it signed the qualified appraisal summary (Form 8283, Part B); (2) an “unofficial” copy of Form 8282. If First Church does not provide this information, then Second Church should request it.
Example. Same facts as the previous example, except that Second Church does not dispose of the car until December of 1999. Since this is more than two years after John donated the car to First Church, Second Church is not required to file Form 8282.
Example. If Second Church gives the car to another church, at no charge, in furtherance of its religious purposes, then it will not need to file a Form 8282 even if the disposition occurred within two years of the date John made the original gift to First Church.
Conclusions. This article has reviewed what church treasurers need to know about Form 8282–when their church receives a gift of noncash property from another church or when it disposes of property to another church or charity. In summary, be aware that you may have to file a Form 8282 anytime that another church or charity donates property to your church. Also, note that if your church gives donated property to another church or charity, you may need to provide the other church or charity with the information summarized in this article.
