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Donation Quiz

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73
Created on December 30, 2020

Donation Recording Quiz

This quiz will test a person's knowledge on recording various types of donations.

Your results are for personal use and only available to you.

1 / 10

Category: General Questions

Question:

On a donor's statement, does each donation need a date next to it? See the example below.

  • 01/15/2022  $50.00
  • 01/30/2022  $25.00

According to IRS publication 1771 page 4, under the Recordkeeping Rules, subsection 'Requirement', the date and amount are both needed. While the IRS publication 1771 says the donor is responsible for this information, the church should have it on the donor statement so they can match it their records such as a bank record like a cancelled check or bank statement.

According to the IRS website a written acknowledgement is needed for a contribution over $250.00. The exact wording is "A donor claiming a deduction of $250 or more is also required to obtain and keep a contemporaneous written acknowledgment for a charitable contribution ." For a single donation under $250.00 the donor can provide their own records to prove the donation -- ie like bank records, credit card receipts. Or the church can provide the written acknowledgement but they are not mandatory to do so. Keep in mind if there are multiple donations that total to $250.00 or more, then the church must do a written acknowledgement of all the donations and the dates of them.

2 / 10

Category: General Questions

Question:

Does the church have to provide a written acknowledgement for a single donation under $250.00?

3 / 10

Category: General Questions

Question:

The donor's total donations for the year are $550.50, does the church have to provide a written acknowledgement to the donor?

According to the IRS website donations that equal $250.00 or more need an written acknowledgement.

4 / 10

Category: Vehicle Donations

Question:

When a vehicle is donated that is claimed to have a value of more than $500.00, what IRS form must the church fill out? 

Please review the IRS instructions for the IRS Form 1098-C to see who must file.

5 / 10

Category: General Questions

Question:

Which of the following statements is not used on a donor's statement?

There are three different statements that the church can used depending on the circumstances of the donations. When these statements are not made the IRS can disallow the donation. See the court case in 2012 that dealt with this issue -- David and Veronda Durden v. Comm’r, TC Memo 2012-140 May 17, 2012.

  1. “No goods or services were provided by the church in return for the contribution.” Or
  2. “Goods or services that the church provided in return for the contribution consisted entirely of intangible religious benefits.” Or
  3. “The amount of the contribution that is deductible for federal income tax purposes is limited to the excess of
    money (and the fair market value of any property other than money) contributed by the donor over the value of goods or services provided by the church.”

6 / 10

Category: GIK - Or Non-cash donations

Question:

What IRS form does the church have to fill out within 125 days, if they decide to sell or dispose of a non cash donation that is worth more than $5,000.00? 

The IRS form 8282 is to be filled out with 125 days of selling the property. The sold property has a three year limit on the reporting of it. Please review the form instructions for the 8282 to see all the requirements under the 'Who Must File' section.

7 / 10

Category: GIK - Or Non-cash donations

Question:

For gift in kind donations (ie non cash donations) should the value of the gift of kind donation be found on the donor's statement?

According to IRS publication 1771, the value is never placed on the donor's statement - ie the written acknowledgment. This is the instructions about the information that should be on the donor's statement.
1. the name of organization
2. the amount of cash contribution,
3. a description (but not the value) of non-cash contribution,
4. a statement that no goods or services were provided by the organization in return for the
contribution, if that was the case,
5. a description and good faith estimate of the value of goods or services, if any, that an
organization provided in return for the contribution,
6. a statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits, if that was the case.

8 / 10

Category: GIK - Or Non-cash donations

Question:

For gift in kind (non-cash) donations that are equal to or over $5,000.00, who determines the fair market value of the donation(s)? 

According to IRS publication 526, page 21, donations that are equal to or over $5,000.00, a paid professional appraiser must be used and their written appraisal must be included with the donor's tax return.

9 / 10

Category: Quid Pro Quo

Question:

The church charges $100.00 for a fall festival dinner. The meal is valued at $30.00 and the donation is $70.00. Does the church need to provide a written acknowledgement for the $70.00 donation?

This question falls under a quid pro quo donation. These are found in the IRS code section 6115.

10 / 10

Category: General Questions

Question:

The donor makes two donations of $260.00. Can the donor claim the deduction using their own bank records?

As stated in the IRS publication 1771, the church must send a written acknowledgement (donor statement) to the donor for any one time contribution over $250.00.

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