H2R CPA Blog
Tax Reform Resource Center
by H2R CPA Team
Your nonprofit probably already ensures that donors receive a receipt with information about claiming a charitable contribution deduction on their tax return. But your obligations may go further than that. For non-cash donations, you might have responsibilities related to certain tax forms.
Form 8283 for donors
When filing their tax returns, donors must attach Section A of Form 8283, “Non-cash Charitable Contributions,” if the amount of their deduction for all non-cash gifts is more than $500. Only when a single non-cash contribution is greater than $5,000 does the donor need to complete Section B, which must be signed by an official of the organization receiving the donation or another person designated by that official. When you return a Schedule B to a donor, the donor should provide you with a full copy of Form 8283.
Donors usually must obtain an appraisal for donated property over $5,000. However, your official’s signature on Section B doesn’t represent concurrence with the appraised value of a donation. It merely acknowledges receipt of the described property on the date specified on the form.
Form 8282 for nonprofits
Your organization generally needs to file Form 8282, “Donee Information Return,” with the IRS if you sell, exchange or otherwise dispose of a donated item within three years of receiving the donation. File the form within 125 days of the disposition unless:
You also must provide a copy of Form 8282 to the donor. When a donated item is transferred from one nonprofit to another within three years, the transferring organization must provide the successor with its name, address and tax identification number, a copy of the Form 8283 it received from the original donor, and a copy of the Form 8282 within 15 days after filing with the IRS.
Failing to file required forms can lead to IRS penalties. While your organization may be excused if you show the failure was due to reasonable cause, your donor still stands to lose the tax deduction — a result neither of you want.
Contact H2R CPA at 412-391-2920 or email@example.com for more information on nonprofit tax reporting requirements. Our team would be pleased to provide a complimentary consultation.
by Joseph M. Delisi, CPA, Principal
Changes to Solicitation of Funds for Charitable Purposes Act under Act 71
Recently signed into Pennsylvania law, Act 71 increases the threshold for audits, reviews, and compilations of the financial statements required to be submitted by nonprofit organizations that are registered under the Charities Act in Pennsylvania.
The new thresholds for required financial reports are as follows, based on gross annual contributions received by nonprofit organizations:
Act 71 becomes effective for renewal registrations due February 15, 2018 (organizations with a fiscal year-end of March 31, 2017) and later. It is important to also check your contracts and by-laws for any additional required reporting as they may be different from the requirements for Pennsylvania.
Act 72, a companion piece of legislation, changes the due date requirement to be based on postmark date rather than the date received by the Bureau of Corporations and Charitable Organizations. The Charitable Organization Registration Statement (BCO-10) form was also updated in 2017 to be shorter and more user friendly.
Contact H2R CPA at 412-391-2920 or firstname.lastname@example.org for additional details, or if you have any questions regarding nonprofit reporting requirements in Pennsylvania. Our Nonprofit Services Group team members would be pleased to assist you.
by Paul K. Rudoy, CPA/PFS
We are in a period of uncertainty with two tax bills proposed and nothing finalized. However, there are two items that every taxpayer should look at before year-end: state & local tax and charity.
State and local tax deductions (SALT)
The State and Local tax deduction is very likely going away. Therefore, if you pay state and local estimated tax payments, you should consider paying your fourth quarter estimated tax payments in December as opposed to waiting until January 15. You might also want to consider paying the first quarter of 2018’s expected estimated tax payment in December to get a deduction that will not exist any longer.
Of course nothing in taxation applies to everyone. If you are an Alternative Minimum Tax (AMT) payer, paying your SALT payment earlier will not help you. Also, if you stretch to paying your April 2018 payment in December 2017, take a look and see if this will cause an over payment that could increase your taxable income for 2018.
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