In theory, a donor is accountable for putting a worth on non-cash contributions (a making, a piece of land, or even a uncommon operate of art). But, a nonprofit organization also has to estimate the worth, given that a nonprofit that accepts donations with inflated values assigned to them risks losing its exempt status. Your organization also requires to understand just how much the donated house is worth in order that it may reflect the worth accurately in its personal economic statements and know the correct worth of its asset portfolio. Why? Given that overvalued assets can expense your organization its credibility.
Here’s an instance: In 2003, the Wyobraska Wildlife Museum in Gering, Nebraska, was a compact facility far from any sizeable population place. This museum held greater than 800 significant game trophies and exotic animals, which had been basically tossed into an old railroad auto and 3 other storage facilities (they undoubtedly had been worth lots if they got that sort of therapy!). The museum reported that its collection was valued at more than $4.two million. This worth had been assigned since it was the worth that the donors placed on the taxidermy carcasses it donated - plus the museum blindly accepted the donor values.
Just after an April 14, 2005, report inside the Washington Post titled “Big Game Hunting Brings Significant Tax Breaks” exposed the practice of wealthy hunters taking inflated tax deductions from the donation of their trophy kills to pseudomuseums, the IRS cracked down. Now taxidermy deductions are restricted for the expense of preparing, stuffing, or mounting the animal. Deductions for travel and charges relating for the hunting and killing of your animal are no longer permitted. The implications of incorrectly valuing your organization’s donations will be damaging, so within this section, I clarify how you can actually prevent concerns.
