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Form 8282 – What, When, And Why Must It Be Filed?

When making non-cash charitable contributions, most donors are aware of Form 8283. This form must be filed as a part of the taxpayer’s 1040 if the taxpayer made non-cash charitable contributions of $500 or more during the year. This form includes information about the recipient organization and a summary of the items that were contributed.

Form 8283 has sometimes been utilized by the taxpayer as acknowledgement from the recipient organization. However, this is not the intent of Form 8283 and the IRS does not consider a completed Form 8283 as proper acknowledgement.

Less well known is Form 8282, Donor Information Return. This return is completed by the recipient organization and sent to the IRS Service Center in Ogden, UT. In addition, a copy must be provided to the donor. When the organizations disposes of donated property within two years of the date of the donation, the organization must complete and file the return.

Before getting concerned about the disposition of numerous small items, such as household goods sold by The Salvation Army thrift store, it should be noted that Form 8282 should only be filed for items that are included in Section B of the Form 8283. Part B items are those that have a value in excess of $5,000. Publicly traded securities are excepted and do not require a Form 8282.

There are two additional exceptions to the filing of the Form 8282:

1. If the item had an original appraised value of less than $500. A Section B item of this about is possible if the done gave multiple similar items to the organization, totaling in excess of $5,000.

2. If the Section B items were used to fulfill the exempt purpose of the tax exempt organization. For example, a tax-exempt relief organization would not have to file a Form 8283 for medical supplies received and used in assisting disaster victim.

Form 8282 must be filed by the organization within 125 days after the date of disposition of the asset. Failure to file the form, or filing an incomplete form, can subject the organization to a $50 penalty.

This is all well and good, but the question that may be lurking in your mind is “Why? What difference does it make what the organization does with the items?” In some cases, the amount of the charitable contribution deduction received by the organization is dependent on the use of the asset by the recipient organization. If the asset is not used to further the exempt purpose of the organization, a lower deduction is available to the donor. For example, assume that a taxpayer donates a painting to an art gallery. This painting has a basis to the donor of $10,000 but a fair market value at the time of the donation of $50,000. If the organization uses the painting as a display in its gallery, the painting is being used for the exempt purpose of the art gallery and the donor gets a deduction for fair market value (assuming the donor has owned it for over 12 months). If, within two years of the contribution, the art gallery sells the painting, the donor’s contribution is reduced to basis, or $10,000 in this case.

In order to protect the amount of contribution that can be deduction, the donor should place restrictions on the recipient organization that prohibits sale of the asset during the two-year time period, and require the organization to notify the donor if the asset is sold.

Dr. John Stancil (My Bald CPA) is Professor Emeritus of Accounting and Tax at Florida Southern College in Lakeland, FL. He is a CPA, CMA, and CFM and passed all exams on the first attempt. He holds a DBA from the University of Memphis and the MBA from the University of Georgia. He has maintained a CPA practice since 1979 with an emphasis in taxation. His areas of expertise include church and clergy tax issues and the foreign earned income credit. He prepares all types of returns, individual and business.

Dr. Stancil has written for the Polk County Business Journal and has presented a number of papers at academic conferences. He wrote the Instructor’s Manual for the 13th edition of Horngren’s Cost Accounting. He is published in the Global Sustainability as a Business Imperative, Green Issues and Debates, The Encyclopedia of Business in Today’s World, The Palmetto Business Review, The CPA Journal, and in the NATP TaxPro Journal. His paper, “Building Sustainability into the Tax Code” was recognized as the outstanding accounting paper at the annual meeting of the South East InfORMS. He wrote a book entitled “Tax Issues Faced by U. S. Missionary Personnel Abroad ” that will soon be published.

He has recently launched a new endeavor, Church Tax Solutions, which presents online, on demand seminars on various church and clergy tax issues.

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