Contact UsOne of my clients is a church and a member wants to donate a car to the church to be given to the youth minister. The church does not have any procedures for handling this type of donation and I haven't done anything in this regard. What do I need to do and be aware of to handle this properly. The donor states the car is worth $1,800.
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John Stancil
There are a couple of issues with what you are presenting me. First, let's talk about the rules. When the car is donated to the church, they will have to give the donor a 1098-C within 30 days. Since they are not selling the vehicle, they can place the blue book value on the form and indicate that it was not sold but used in its exempt purpose. The church should verify the value and not accept the amount stated by the donor. The donor will receive a copy.
Assuming that the vehicle is given to the youth pastor,it would be treated as additional compensation to him.
However, there is a problem with all the above. Since the donor is giving the car to the church and telling the church to give it to the youth pastor, he is exercising "undue control" over the contribution and may not take a charitable contribution deduction. The church cannot accept the vehicle and do anything other than give it to the youth pastor. Under this scenario, the church cannot issue a 1098-C. Lacking any contribution deduction, in this case it would be better for the donor to give the car directly to the youth pastor, who would then not have any income from the gift of the car.
There is a way around this, however. If the donor, rather than specifying that it is to be given to the youth pastor, suggests that it be given to him it can become a charitable contribution for him. In this instance, the church is free to do whatever it chooses with the car. They need to make this abundantly clear to the donor. Should they find a greater need for the car than the youth pastor, they would be free to give it to that party.
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512 weeks ago
Assuming that the vehicle is given to the youth pastor,it would be treated as additional compensation to him.
However, there is a problem with all the above. Since the donor is giving the car to the church and telling the church to give it to the youth pastor, he is exercising "undue control" over the contribution and may not take a charitable contribution deduction. The church cannot accept the vehicle and do anything other than give it to the youth pastor. Under this scenario, the church cannot issue a 1098-C. Lacking any contribution deduction, in this case it would be better for the donor to give the car directly to the youth pastor, who would then not have any income from the gift of the car.
There is a way around this, however. If the donor, rather than specifying that it is to be given to the youth pastor, suggests that it be given to him it can become a charitable contribution for him. In this instance, the church is free to do whatever it chooses with the car. They need to make this abundantly clear to the donor. Should they find a greater need for the car than the youth pastor, they would be free to give it to that party.