Thank you for the information on in-kind things. Just 2 weeks ago I attended a workshop given by the IRS and they told me we could not report the in-kind support we received in the way of office supplies, health insurance and liability insurance coverage for our employees, postage cost etc. Now I think they gave me the wrong information. The organization that gave us that start up support has given us a copy of their monthly accounting reports that verify what they contributed to us in 2003 well over $25,000. We are now totally independent of the in-kind they were helping us with. It has been replaced with a direct grant and we have set up our own relationships with vendors.
I think the IRS was correct in saying that you could not report the payments of insurance or postage. The instructions to Form 990 say you should report gifts actually received and further specify that you cannot report the value of gifts of services. If you actually received the office supplies, you should report them. But payments made on your behalf are like services and are not reportable as contributions on your return.
You can, and must, report the new cash grant as a contribution, and the organization, if it pays federal income taxes, can deduct it as a charitable contribution.
Monday, March 7, 2016
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