Form 990 Assets

[Lion]

A treasurer of a music school who files their Form 990 and knows me from church wrote:

We received a donation of a harpsichord valued at $2,000. Should we
account in the books for this and if so, how?

He uses QB for accounting and the school files Form 990. Any help for him

[Uncle Sam]

Form 990 Assets

Yes - you do need to report in-kind donations on Form 990.
Don't know where off hand - but there IS a line that requests it.

[Lion]

At donor's cost basis?

Thanks, Sam. Does he report at donor's cost basis? FMV? Lower/higher of?

[Lion]

Receipt of Donations

I'm bumping this up in hopes of someone familiar with Form 990 knowing how to report a donation received in-kind, a harpsichord with a FMV of $2,000. Does music school book this asset at FMV? Donor's cost basis? Lesser of? Do they need donor info, such as name and address? Any help for their treasurer who's a jazz pianist and not an accountant. I'm not an accountant, either, for that matter. Had one Form 990 a long time ago for a warm-up fund, but they had no assets except their bank account.

[MRTAX4EA]

990 Reporting

The receipt of the item is acknowledged at FMV. The assets are reported at cost which requires an adjustment on the return.

An example of this would be appreciated stock. Cost basis = $100 and FMV = $1,000. Donor does not have to sell the stock. He gets FMV for his charitable deduction. The charity could then sell the stock at a gain, but would not be subject to any tax.

Contributions in excess of $1,000 are reported on Schedule B, but that information is not required to be made available publically like the rest of the Form 990.

[Lion]

Thank you

Thank you. That's what I was thinking. In case the harpsichord has decreased in value (donor bought at $10,000 and donates now with FMV $2,000) does the music school book the asset at $10,000? (Music school trying to find out donor cost.)

[Davc]

The receipt of the item is acknowledged at FMV.

Disagree. The receipt is acknowledged, but the general rule is that the TP is required to state a value, not the charity.

The assets are reported at cost which requires an adjustment on the return.

Disagree again. The "cost" of donated assets on the charities books should be FMV at the time of the gift. (this is explicitlt stateed in the 990 instruction with regard to non-publicly traded securities.

[Lion]

Thanx

Thanx, Davc. I was OK on advising him how to acknowledge; I'm a church treasurer and could rattle off that answer from the top of my head. But, since main stream churches seldom file tax returns and keep books in a format specified by the parent church, I was lost on advising him how to "book" the donation in QB and what info he'll need to report it on the school's tax return. Guess I better download a copy of the new Form 990 and Instructions and read them over and maybe highlight passages for him.