Tax Brief: Form 990, Schedule M – Noncash Contributions
From donated clothing to medical supplies to securities, non-cash contributions are a vital form of support of many non-for-profit organization.
The IRS Form 990 Schedule M is used to report information about non-cash contributions received by a not-for-profit organization. The schedule is required for organizations that received in aggregate more than $25,000 worth of non-cash contributions during the tax year.
The organization also must complete the schedule if it received a donation of any work of art, historical treasure or artifact, scientific specimen, or any qualified conservation contributions regardless of the donation value. While the schedule covers virtually all non-cash goods, it should not be used to report donations of services or the donated use of facilities, equipment, or materials. Management of not-for-profit organizations that receive non-cash contributions should familiarize themselves with Schedule M and its reporting requirements.
Part I – Donated Property
The first part of the Schedule is designed to summarize the non-cash contributions based on the types of property that were received. This consists of a matrix that lists 24 different property types covering virtually any kind of non-cash contribution a non-profit could receive. The schedule also provides four additional lines for any donations that don’t fall within those 24 types.
For each type, the organization must detail the number of contributions or items contributed, non-cash contribution amounts reported on Part VIII, Line 1g (Statement of Revenue), and the method that was used to determine the non-cash contribution amounts. Organizations can save a considerable amount of time and effort by developing internal processes for tracking this information throughout the year rather than waiting until its time to prepare the tax return to piece it together.
Part I of the form also asks the not-for-profit organization to report how many Forms 8283 (Noncash Charitable Contributions) were received and completed by the organization. Additionally, part I includes some questions related to policies and procedures for accepting non-cash donations and reporting with respect to non-cash donations.
Part II – Supplemental Information
The supplemental information portion of the Schedule is primarily used to provide additional detail about any holding period requirements for donated assets or use of third parties to solicit, process, or sell non-cash contributions.
Part II is also used to describe whether the non-profit is reporting the number of contributions, the number of items contributed, or some combination of the two for each type of property from Part I.
The purpose of this article is to summarize the major components and reporting requirements of Schedule M and is not intended to be all encompassing or serve as replacement for the Form’s instructions.
This article is meant to be a resource and provide tools to assist your organization. Please consult your tax advisor regarding your specific tax situation.