II. Accepting Cash Gifts
A. Donation Receipting/ IRS Regulations | B. ECC Receipt Form | C. Restricted and Designated Gifts | D. Christmas and Special Gifts to the Pastor | E. Memorial Funds | F. Stock as a Charitable Gift | G. Real Estate as a Charitable Gift | H. Tangible Personal Property, Partnerships and Royalties as Charitable Gifts

A. Donation Receipting/IRS Regulations

INTRODUCTION:
Charitable contributions are a very important part of most churches' annual budget. This makes the proper handling of the depositing and receipting of these contributions a very important function in the church.

These are the six requirements that all charitable contributions must satisfy:

• Must be a gift of cash or property
  Something of value must be given to the church (usually cash)
  May not be donated personal services or free use of some personal asset
• Must be claimed as a deduction in the year in which the contribution is made
  Exception is granted for checks in the mail at end of year and deposited early in the next year
• Must be unconditional and without personal benefit to the donor
  Made payable to or for the use of qualified charity
  Covenant churches fall under the national churches IRS charitable organization designation
• Must be within the allowable legal limit
  Individual donors are limited in the amount of contributions that may be deduct in any one year based on their income
  Recipient churches are not responsible for staying within these limits, but should be aware of their existence
• Must be properly substantiated
  Cash gifts of less than $250: Canceled check or a receipt or letter from the church
  Cash gifts of $250 or more: written acknowledgment required (sample attached) including:

a) The amount of cash or a description of property received
b) Whether the church provided any goods in exchange for the gift and if so, a description and good faith value of the goods given.
c) If no goods or services were received, then the receipt must include a statement similar to ' The only things received in exchange for this donation were intangible religious benefits.'

Contributions over $75 for which goods or services were given in return

I.E.: A donor contributes $100 to a church and receives dinner tickets worth $40 in exchange for the donation. The church must issue a receipt to the donor stating that the amount deductible is limited to the amount by which the donation given exceeds the value of the property received by the donor, and a good faith estimate of the value of the goods received.

Contributions of non-cash property
Covered by a set of complicated rules not within the scope of this paper

Church is not responsible for the appraisal value of the gift. Gifts of real estate present several unique challenges including environmental issues associated with the property. The Estate Planning Services Office at (773) 784-9911 can provide help with these issues. (See Section II G)