How to enter Bargain Sale as non-cash in RE?

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Vicky Nguyen
Vicky Nguyen ✭
Seventh Anniversary First Reply
in Blackbaud Raiser's Edge NXT®: General Discussion
Can someone let me know how you record Bargain Sale in RE? I call BB and they suggest to create Gift Subtype and Gift type select other.

Thanks
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  • Christine Cooke 2
    Christine Cooke 2 ✭
    Ancient Membership Facilitator 4 Name Dropper Photogenic

    Vicky Nguyen:

    Can someone let me know how you record Bargain Sale in RE? I call BB and they suggest to create Gift Subtype and Gift type select other.

    Thanks

    What is a Bargain Sale?  are you referring to something akin to an auction?  I ask because you mention non-cash.  Non-cash gift is usually gift-in-kind.

    BB's suggestion of a Gift Subtype could be your answer. But more detail about what you are trying to accomplish would help.
  • Vicky Nguyen
    Vicky Nguyen ✭
    Seventh Anniversary First Reply

    Christine Cooke:

    Vicky Nguyen:

    Can someone let me know how you record Bargain Sale in RE? I call BB and they suggest to create Gift Subtype and Gift type select other.

    Thanks

    What is a Bargain Sale?  are you referring to something akin to an auction?  I ask because you mention non-cash.  Non-cash gift is usually gift-in-kind.

    BB's suggestion of a Gift Subtype could be your answer. But more detail about what you are trying to accomplish would help.

     

    Bargain sale occurs when a charity purchases an asset from seller for less than its fair market value. The difference betweent he FMV and the sales price = A Gift to the chartiy. We can't really count as Cash, neither GIK. That's why we're not sure how to record it.

  • Melissa S Graves
    Melissa S Graves ✭
    Ninth Anniversary Facilitator 3 Photogenic

    Vicky Nguyen:

    Christine Cooke:

    Vicky Nguyen:

    Can someone let me know how you record Bargain Sale in RE? I call BB and they suggest to create Gift Subtype and Gift type select other.

    Thanks

    What is a Bargain Sale?  are you referring to something akin to an auction?  I ask because you mention non-cash.  Non-cash gift is usually gift-in-kind.

    BB's suggestion of a Gift Subtype could be your answer. But more detail about what you are trying to accomplish would help.

     

    Bargain sale occurs when a charity purchases an asset from seller for less than its fair market value. The difference betweent he FMV and the sales price = A Gift to the chartiy. We can't really count as Cash, neither GIK. That's why we're not sure how to record it.

     

    See IRS publication 526 for the definition of Bargain Sale. It is as described above but has some complexities (i.e. it can't be a standard sale or discount given to all organizations like yours, it has to be a special one time discount). I have never recorded one. I would talk to the finance office and have them maybe ask your auditors how to properly do it. If it is not significant, I can imagine the finance office choosing not to book it at all.

  • Vicky Nguyen
    Vicky Nguyen ✭
    Seventh Anniversary First Reply
    Thank you :-)
  • Jill Freidmutter
    Jill Freidmutter ✭
    Ancient Membership Facilitator 2 Photogenic
    Interesting... It sounds similar in concept to a discount on services. For example, a caterer caters an event for us. They give us a bill for the full amount, with a discount for us, so we may be paying 1/3 of the original price. I enter that difference as a gift in kind. I'm guessing the IRS considers these very different things. 
  • Melissa S Graves
    Melissa S Graves ✭
    Ninth Anniversary Facilitator 3 Photogenic
    Bargain sales and gift in kind ONLY apply to gifts of physical propery. Not services. So while you may put into your system if you are recording the gift for recognition purposes - a discount on services is not technically either a bargain sale or GIK.
  • JoAnn Strommen
    JoAnn Strommen ✭✭✭✭✭
    Ancient Membership Facilitator 4 Name Dropper Photogenic
    ...And gifts of services are not eligible for tax deductions. See IRS publications 526.

    If you're talking discount of the price of food served, only the caterers truly know the wholesale costs they incurred. Any amount they can claim is based on their tax basis for the contributed food, not fair market value. 1/3 is probably about their cost.  For "donations/discounts" like this all we do is a thank you letter describing services received. No $ figures. Can include statement saying they can contact their tax advisor regarding any tax implications.


     
  • Jill Freidmutter
    Jill Freidmutter ✭
    Ancient Membership Facilitator 2 Photogenic
    Thank you Melissa and JoAnn for clarifying this. I guess I should make a separate category for gifts of services. They are of value to our agency so we record them. When we send the donor a thank you for these types of gifts we state "Valuation of in-kind contributions is the privilege and responsibility of the donor.

    "

    Perhaps on gifts of services we should remove this since they are not in-kind contributions. I'll check out the IRS reference. Thank you, thank you, thank you. I learn so much from these forums.

  • JoAnn Strommen
    JoAnn Strommen ✭✭✭✭✭
    Ancient Membership Facilitator 4 Name Dropper Photogenic
    Jill, I do like your statement for in-kind gifts. May steal some verbiage. wink
  • Vicky Nguyen
    Vicky Nguyen ✭
    Seventh Anniversary First Reply
    We want to count this kind of gift on Philanthropy report. If we record this as GIK, then it won't show on the report.


    Thanks all for the info :-)
  • Melissa S Graves
    Melissa S Graves ✭
    Ninth Anniversary Facilitator 3 Photogenic

    Vicky Nguyen:

    We want to count this kind of gift on Philanthropy report. If we record this as GIK, then it won't show on the report.


    Thanks all for the info :-)

    That sounds like it is a decision you have made internally to not count GIK on your philanthropy reports. Maybe something to reconsider?

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