The Alternative Gift Asset: A Gift-in-Kind

A gift-in-kind is typically an item or a service that you donate to a charitable organization, like your favorite charitable organizations. Such gifts are likely to be tangible assets—things you can put your hands on, carry or place in your attic, as opposed to cash, stocks or real estate. Commonly, people donate furniture, jewelry, books, stamps or artwork.

The rules regulating lifetime gifts-in-kind differ from those governing other assets, such as cash or securities. The most important information for a donor to know is if charitable nonprofits can use the gift to further our exempt purposes.

Many times the answer is yes. A museum often accepts works of art, for example. In that case, if the charitable organization will use the asset—and not sell it—then the donor is allowed to deduct, within limits related to the donor's income, the entire value of the asset. (See IRS Pub. 561 for advice in determining the value of your property.) If the asset does not have a "related use," a purpose related to our exempt mission, then the donor is permitted to deduct only the cost basis of the asset.

A contribution of your personal services is not deductible. You may deduct, however, any out-of-pocket expenses incurred in the course of performing services away from home for charitable nonprofits—meals, lodging and travel expenses—as long as there is no significant element of personal pleasure, recreation or vacation in the travel.

Please contact Mary Ludwig, Development Director at 712-732-5127, for more information.

The information on this site is not intended as legal, tax or investment advice. For such advice, please consult an attorney, tax professional or investment professional.

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