CDP Policy for Acceptance of Non-Cash Gifts
The types of non-cash gifts accepted by Congressional District Programs are broad. Listed below are the most common types plus any special instructions that we may require. Under all circumstances the donor should consult with his or her tax consultant for possible tax consequences regarding their gifts. Unrelated Business Income and possible tax is of concern to CDP and each gift needs to be looked at on a case-by-case basis and the donor should not presume that any or all gifts will be accepted by CDP. Please fill out the Non-Cash Gift Form, located below, for all gifts. Please note that CDP charges 3.5% of the value on said incoming, non-cash gifts over $500 (with the exception of insurance policies, partnerships, or LLC interests). Additionally, if you'd like to aknowledge your donors for non-cash gifts under $500 you may use our Sample Donation Receipt Letter.
Vehicles – Here we have four possibilities with many different types of vehicles (cars, trucks, motorcycles, boats, airplanes). All four possibilities need CDP's Non-Cash Gift Form and a clear photograph of the vehicle submitted.
IMPORTANT NOTE :
Beginning January 1, 2005, the IRS is requiring additional steps be taken when accepting a vehicle donation into your program. The charitable deductions that a donor of a vehicle (automobile, motorcycle, boat, or plane exceeding $500 in claimed value) will receive now depends on how the recipient program plans on using that donated vehicle. Changes will be highlighted in italics below.
First, will the donated vehicle be used and maintained by the program? The title must reflect the ownership by Congressional District Programs but may include the program name secondarily. (E.g., Congressional District Programs FBO Your Program Name) We require proof of insurance naming CDP as owner and insured. We require reports telling us the nature of use and any personal use of the vehicle. You must list this information on the Noncash Gift Form below. Any violation or misuse may cause CDP to re-evaluate the ownership of the vehicle. An example of needed information in this report would be: Do you intend to carry passengers, are these passengers minors, where will you be carrying them, do you have parental authorization forms signed and are you carrying insurance information for these passengers (especially minors) has a waiver been signed by an authorized parent or guardian allowing you to act on there behalf and releasing CDP from any harm in the event of an accident or an incident. Complete a third-party appraisal and Form 8283 and send to CDP for signature to establish the donor's tax deduction. CDP will forward this form to the donor. Additionally, a mileage log will need to be kept. At the end of each year, a 1099 will be issued to the person using the vehicle for any personal use as taxable income.
If the program intends to use the donated vehicle (must only be used in a manner that furthers their charitable purpose), that Program Manager is required to send the donor the Donor Certificate for Gifts of Vehicles within thirty (30) days.
Second, we have the donation of a vehicle where it is your intention to sell the vehicle for the proceeds and deposit the funds into the program account. Here we would not require a re-titling into CDP ’s name assuming the sale is imminent. Do not drive the vehicle. The donor should sign the title but leave the buyer blank. Complete a third-party appraisal and Form 8283 and send to CDP for signature to establish the donor's tax deduction. Once the vehicle is sold, you must complete a Form 8282 (for disposal of donated property) and send to CDP for signature. Payment for the vehicle should be sent to us for deposit into your program account.
If the program intends to sell the donated vehicle without using it (and does not make any improvements to the vehicle itself), the donor may only claim a deduction equal to the total income the program received from the sale of that vehicle.
The IRS will not accept a charitable deduction from the donation of a vehicle unless the donor provides the Donor Certificate for Gifts of Vehicles from the recipient program (which should be attached to the donor's tax return).
Third, if the vehicle is donated for the purpose of being a prize in an auction or other fundraising event, the present owner of the vehicle should complete an IRS Form 8283. We do not require a re-titling into CDP ’s name first. Do not drive the vehicle. Once the winner is chosen, we will require a completed W-9 Form from the winner to report the prize as taxable income. Once the vehicle is auctioned, you must complete a Form 8282 (for disposal of donated property) and send to CDP for signature.
Fourth, if a vehicle is donated to the program at CDP, and it will be given to a Grant recipient, we would not require a re-titling into CDP ’s name. Do not drive the vehicle. CDP requires that a Grant Form be filled out and sent to us for review. The vehicle may then be given to the grant recipient. Re-titling and insurance will be the responsibility of the grantee.
In all cases, if the item is valued at more than $5,000, a third-party appraisal, IRS form 8283 and CDP's Non-Cash Gift Form must accompany the gift before it will be recorded and subsequently receipted.
Securities
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Publicly traded – securities are held in one of two forms - certificated & street name. Certificated shares are actual certificates held in the owner’s possession. Street name shares are held for the owner in a brokerage account. A Third Party Release Form and an Irrevocable Stock Bond Powers Form must accompany any certificates being donated to CDP. For all gifts of certificated stock, a third-party appraisal, IRS form 8283 and CDP's Non-Cash Gift Form must accompany the gift before it will be recorded and subsequently receipted. Securities held in street name must include CDP's Non-Cash Gift Form in order to be properly receipted and recorded. These securities can be transferred into the CDP brokerage account at McKim & Co. Please call us for the DTC number and account number to transfer the securities. In all cases, if the stock gift is less than $10,000 the stocks will be immediately liquidated and the proceeds will be placed into your program account at CDP. If you are donating more than $10,000 and you recommend that CDP keep the stocks for the benefit of your program at CDP, please read the instructions below for “Establishing a Brokerage Account” before attempting to create one.
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Closely Held C stocks – CDP will only accept these types of gifts when accompanied with a buy back agreement. These gifts require an independent qualified appraisers appraisal for valuation.
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Sub S Corporate stocks - CDP will accept these gifts under the same conditions as the closely held C stocks.
Mutual Funds - CDP accepts these gifts. For ease of processing and a quick and pain free transfer you will need to let us know where the mutual funds are held and CDP will establish an account with them (you provide the application) then you can make a lateral transfer of the funds. With a recommendation from you we will either keep or sell the funds.
For Gifting Securities or Mutual Funds - Please also see detailed instructions here.
Establishing a Brokerage Account inside your CDP program - We will consider establishing an investment account for your project if the value of the gift will meet out minimum value guidelines ($10,000 minimum for investments at McKim & Co., and at least $50,000 minimum for establishing brokerage accounts outside of McKim). Program Managers and PDOs will be able to view their accounts online and place trades online if the investments are with McKim. (Select the “Login” link at the top of this page and follow the instructions for establishing a password to see your program statements on the web if you do not already have one.) CDP charges a 2% annual management fee for all investments within your program at CDP. This is calculated by charging ½% each quarter on the average of the quarterly balance.
Real Estate – Real Estate, like vehicles, can be held for program usage or sold for the proceeds. Either way a Quit Claim Deed will need to be recorded in your local courthouse. CDP Management must approve each gift of real estate before gifting. There are circumstances under which CDP may not want to accept the gift as we look at environmental issues, liens and encumbrances.
In all cases, an appraisal and IRS form 8283 must accompany the gift before it will be recorded and subsequently receipted.
Collectibles - CDP may accept these kinds of gifts if the donor can show the justification for accepting such gifts. In all cases an appraisal and IRS form 8283 must accompany the gift before it will be recorded and subsequently receipted.
Partnership & LLC interests or units - CDP is setting forth policies regarding partnership and LLC units or shares being gifted. Also, there have been legal opinions written and procedures set forth for the acceptance and the annual monitoring of these kinds of gifts by various legal counsel. At this point CDP ’s policy will be to accept on a case-by-case basis and with full disclosure.
Assets inside a partnership or LLC will need to be fully disclosed for CDP to make a determination as to accept or not accept the gift. The complete appraisal and IRS form 8283 will be required before we will record this as a gift. Also, timely filing and receipt of the 1065 and it’s K-1 each year. Your annual report to us should include a text statement telling us the activities for the year, how the income was generated, how funds were disbursed, % of any management fees (5% MAX) accompanied with a minimum of 10% annual distribution to CDP fbo your program from the cash flow and before management fees.
Insurance Policies – CDP will accept the donation of insurance policies and will not subject and subsequent cash donations expressly designated for the purpose of paying insurance premiums for the donated policy. However, per our policy & procedures manual and our literature we will collect a fee when the policy matures. Note: no loans against CSV may be made with out permission from CDP Management!
Other Gifts – There may be other non-cash gift items not covered here. Please contact us with any questions you may have regarding any and all gifts and we will always do our best to serve you and your program accomplish its charitable goals.
Take Note - All gifts to your program are important to us. Your completion of the necessary forms as requested indicating exactly what you desire to happen with your gift will assist us in the completion of the gifting transaction process. CDP will take no responsibility for fluctuations in the market value and will take no responsibility for a lack of clearly written and understood instructions.