We are always gratified when a supporter wishes to donate an item of memorabilia or other property that would be of interest to the museum. We are often asked how the process works. While we cannot give tax advice, it is perfectly acceptable for a nonprofit to receive donations in forms other than cash, or “in kind” donations. For in kind donations, the IRS requires that the donor obtain an appraisal on any asset donation claimed at more than $5,000.
In general, non-cash charitable contributions to to a qualified organization* are tax deductible at the fair market value (FMV) of the property contributed. IRS regulations state that you are required to determine the fair market value (FMV) of the donated property, and you must file IRS Form 8283, Non-cash Charitable Contributions, with your tax return if your total deduction for non-cash contributions for the year is over $500.
If you donate non-cash property valued at over $5,000 to a qualified organization*, you are again required to file a copy of IRS Form 8283 with your tax return, however we are also required to sign it, acknowledging receipt of your donation. Our signature does not validate the value but only acknowledges our receipt.
This is just a brief overview of the process, however it is well documented on the IRS Website: General rules regarding contributions and donations. You can find a more comprehensive discussion of these rules in Publication 526, Charitable Contributions and Publication 561, Determining the Value of Donated Property. For information about the substantiation and disclosure requirements for charitable contributions, see Publication 1771.
Once again, please remember that the statements above are not meant to be construed as tax advice. Deductions may be limited, depending upon your individual situation. You are strongly advised to seek guidance from a qualified tax advisor.
*Foynes Flying Boat & Maritime Museum USA, Inc., is recognized as tax-exempt
under section 501(c)(3) of the Internal Revenue Code. EIN: 84-2861777
A copy of our status letter can be provided upon request.