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Gifts in Kind or With an Advantage    (Requires the purchase of the Gifts in Kind module)

"Gifts in Kind" are gifts of property rather than any form of money.

Receipts for income tax purposes for gifts in kind, must include the following:
1. The fair market value of the property at the time the gift was made.
2. The date of the gift.
3. A description of the property.
4. The name and address of the appraiser (if any) of the property.  In Canada "gifts in kind" of $1000 or more require an appraisal.  In the USA you need an appraisal if it is $5,000 or more. In Canada, it is the responsiblity of the church or organization to determine the value of any "gift in kind".

Some monetary gifts result in an immediate or future advantage to the donor that has commercial value. Where someone makes such a gift to a charity, the fair market value of the advantage must be reported on the receipt and deducted from the total gift to determine the eligible amount of the gift. For example, suppose a charity charges an annual $120 membership fee, gives a key chain to its members valued at $10 and offers discounts to its members worth $10, the total advantage received by the donor would be $20. Therefore, the receipt for the eligible amount of the membership fee will be $100.

In Canada, the advantage must be more than a certain threshold to be taken into consideration.  The threshold is the minimum of 10% of the value of the gift or $75.00 CDN (this is called the de minimis rule).  When the advantage is below or equal to this minimum, the eligible amount is the same as the total given.  The correct eligible amount will automatically be shown on the receipt.

However, the de minimis rule does not apply when the advantage is a cash equivalent, (e.g. gift receipt, coupon, voucher) or the object of a fundraising event (e.g. meal, green fees, golf cart rental).

There is also a case in which the donor is not entitled to any receipt at all.  If the advantage is more than 80% of the value of the gift the donor should not be given a tax receipt. The software will still record such a donation but will not issue a tax receipt.  An exception can sometimes be made to this rule by contacting the CRA.

In Canada, the following cases should be avoided as they may not qualify as a gift:
a) a company wants to donate their services to your church or organization
b) an individual wants to buy something or pay for a service for your church or organization

Instead, in case a) above you should tell the company that your church or organization can accept donations as follows:
1) The church or organization will use their services and ask them for a bill.
2) Your church or organization will pay the bill.
3) The company can make a donation for an amount equivalent to the bill total.

In case b) above, you should tell the individual that your church or organization can accept donations as follows:
1) The church or organization will pay for the item/service.
2) The individual can then make a donation for an amount equivalent to the cost of the item/service.

For more details, please consult with your accountant. In Canada you may also contact the Canada Revenue Agency or the Canadian Council of Christian Charities at www.cccc.org or 1-519-669-5137. In the U.S.A. contact the I.R.S.

The rules in countries other than Canada and the U.S.A. may be different - please check with your local tax office or accountant.

To enter a gift in kind or a gift with an advantage, do this:
1. Click the Donations icon.  With the demo/trial version you must choose donations from the pop-up menu.
2. You will see a payment method called Gift in Kind.  Check this if the person made a gift in kind. Near the bottom right of the window there is a box called: Gift with Advantage.  Check this box if the person made a gift of money and received some advantage in return. If there is no Advantage to the donor from the gift then it is not a Gift with Advantage and you should enter it like a regular donation.
3. You will see some new fields on the right hand side of the window.  Fill these in to describe the gift.  Fill in the name and address of the appraiser if it is required according to the rules explained above, otherwise leave it blank.
4. When entering the advantage, see if any of the cases mentioned above it apply.  If yes, then put a checkmark there so that the software knows that the de minimis rule does not apply.
5. Enter the amount of the gift under one of the donation categories.
6. When you have a receipt or bill for the gift because the donor purchased an item for the organization, then put a checkmark where it says: Donor bought item & supplied a receipt.  In Canada, you should try to avoid this type of gift as it may not qualify.  (See the explanation above.)
7. To enter a Gift in Kind without any value on the receipt, but still count toward fulfilling a pledge, put a checkmark on: "Gift in Kind" has no value on tax receipt
8. For some Gift in Kind donations you do not know the value and it will be the donor's responsibility to determine the value. (This only applies in the USA) In this case put a checkmark on: Donor will estimate the value on the tax receipt When you enter the gift, the value will default to $1.00 but on the receipt a blank line will be shown for the donor to fill in the value.
9. If other donors made donations on the same date then enter them.
10. Click [Done] in the menu bar or press F10 when done.

To save space on reports, these abbreviations may be shown:
 GIK means "Gift in Kind"
 GWA means "Gift with Advantage"

If a donor made two donations on the same date, one as a "gift in kind" and one as a regular donation, then you will have to enter the two donations separately.  Enter the donor's first donation, then go to the Action menu and choose Find/Add Another Donation or press F8.  The amount fields will become blank and you will see #2 shown in red to indicate that you are entering a second donation.

To print receipts for gifts in kind or with an advantage, click the Tax Receipts icon and choose View Tax Receipts....  When you have entered some gifts in kind you will see a Gifts in Kind/With Advantage checkbox.  Click it, then give the date range you want.  The date range will start from the day after any previous such receipts you may have done.  Then click OK. Each gift in kind or with an advantage will result in one receipt.  Press Page Down or click on [Next] in the menu bar to see each one.  To print the receipts, click on [Print] in the menu bar.




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