Where can I find definitive answers on church-related tax deduction questions?


Maybe this needs to go under a different forum (moderators, feel free to move if necessary), but thought I would start here... Our members are asking questions again this time of year on what is deductible and what is not. I am not a tax pro by any means, just trying to do what is legal/right for everyone. I have read through many of the resources concerning this, but getting mixed signals. Any advice on the following is appreciated : - if a person donates an item, for example a flat screen monitor to the church youth room or miscellaneous supplies to the nursery, what responsibility does the church have in reporting/recording this, if any? or is it solely up to the individual to claim the items appropriately (itemized deduction) on his/her taxes? - if a person or company does a job for the church, for example some carpentry work, but wants to donate the labor portion of their invoice, I do not see how they can legally deduct that and/or how the church could legally give them a receipt. am I correct? - in the above carpentry example, if the labor cannot be legally deducted, do most churches encourage them to invoice the full amount and then write a check back to the church equal to the amount of labor (thereby making a deductible cash contribution)? or are there limitations or other concerns to this practice? Thank you in advance for any advice.

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My favorite resource regarding churches and charitable gifts is published by Zondervan each year--the Church and Nonprofit Tax and Financial Guide by Dan Busby (check out amazon.com). This book has a wealth of understandable information on a variety of administrative subjects for churches. A copy at every church would be very beneficial in running things properly.

If someone donates quilts to your crib ministry or a DVD player to your youth ministry, a thank you for the (name of item) donation is all that should be necessary from the church. The donor is responsible for valuing the item(s) given, not the church. If the value of the item is more than $250, check out further information in the above book.

"Donated labor" is not eligible for a charitable deduction. The carpenter would be entitled to a deduction for his out of pocket expenses including mileage. Dan Busby on p. 158 says "if the donated out of pocket expenses are $250 or more in a calendar year, the carpenter will need an acknowledgment from the church."

Thank you very much for your reply, Sheri, I appreciate the examples and book suggestion.

Looking forward to see the growth of this site... lots of potential and a great start.

Ok, me again, and I haven't gotten the book that Sheri suggested. Yet. Sorry.

But a small additional issue... I assume that a gift given in memory of the deceased, and paid directly to our church (for a specific fund), is tax deductible and therefore the donor should receive a contribution receipt (and thank-you) from us as a church.

Is this correct? I assume it is with what I have found, but I have also been told differently. ?

Thanks again for any help...

Community Builder

Yes, a gift in memory of someone would be considered a charitable gift.  The IRS requires receipting if the gift(s) total $250 or more.  Most charities provide a gift receipt and thank you with no distinction between the gifts under or over $250. If the donor contributes cash, the donor must have an acknowledgment.

Sheri - As always, thank you for the info and confirmation.