how to handle end of year tax letter when benefits are involved

Patty Neumeier

I know the IRS requires the blurb that "no gifts or services were received,' etc. on an end of year tax letter.  But what if a donor made a donation that does have a benefit received?  Is there different wording that goes on a tax letter?  In the amount donated, do you only send the receipted amount?  Hope this makes sense.  Not sure it is specifically an RE question, but I can't find a report in RE that allows that verbage to be added.

JoAnn Strommen

Patty Neumeier:

I know the IRS requires the blurb that "no gifts or services were received,' etc. on an end of year tax letter.  But what if a donor made a donation that does have a benefit received?  Is there different wording that goes on a tax letter?  In the amount donated, do you only send the receipted amount?  Hope this makes sense.  Not sure it is specifically an RE question, but I can't find a report in RE that allows that verbage to be added.

I don't consider myself a tax expert in any way.  But, per IRS pub 1771 when donor gets benefit it reads:

A required written disclosure statement must:

• inform a donor that the amount of the contribution that is deductible for federal income tax purposes isi limited to the excess of money (and the fair market value of property other than money) contributed by the donor over the value of goods or services provided by the organization
• provide a donor with a good-faith estimate of the fair market balue of the goods or services

_________

So it you have a receipted amount and a an accurate FMV you could say that this is the amount above the FMV of the XXX received. 

You can add a footnote to Reports > Financial reports > Annual Statement Report > Tab 8 Format > Page Footer.

When I had to deal with benefit for a dinner, on our thank you letter/receipt we listed the receipt amount and this statement: Thank you for your gift of $XX for which you received a dinner valued at $YY.00 per $ZZ.00 ticket purchased.  The balance of your gift may be tax deductible to you.  You may wish to retain this letter to consult with your tax adviser.

Hope that helps a bit...<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />