User Support Forum

Hello,

I tried to find this, however I have had no success. We have two scenarios...We purchased a computer that we want to inventory as well as add it to our assets. Then, someone gave us a grand piano that we would also like to add to our assets.

We have since sold the grand piano and would like to input the check as a sale of an asset. How do we do this?

I have searched high and low as to how to add equipment to our fixed assets account. However, I'm missing it somewhere. Thanks for all of your help. These forums have really helped me.

David Danzy--DCMI

We do it this way:

Receipt of non-cash contribution:
DB asset account (piano)
CR non-cash income (piano)

Sale of asset (for cash)
DB checking account ($ sale amount)
CR asset account piano ($sale amount)

This may result in a positive or negative balance in the "asset piano" account. You can show this with an "adjust to market value" equity account where you are adjusting the donated value of the non-cash item to its sale, or market, value.

If you sold the piano for more than the donated value:
DB asset piano
CR equity "adjust to market value"

or if you sold the piano for less than the donated value:
CR asset piano
DB equity "adjust to market value"

I will toss this idea out, but please verify, if you receive a non-cash donation under $2,000, you can accept it and give a tax deduction without verification. For a donation over $2,000, you need at least two appraisals in order to issue a tax deductible contribution statement. (can someone help me with a "yea" or "nea")

Okay...I'm still a little confused. Do I do the "non-cash" contribution in my contributions module? Or do I just enter it in as a transaction in my Fund Accounting Module?

Pray for us as we're believing God for an accountant to handle these things the right way. We're a new ministry just starting out so we have no actual employees yet.

Thanks so much again for your help...

You would create an asset account and an income account in Fund Accounting first.
01-1710-000 donated piano (asset account)

01-4305-000 NON-CASH INCOME (Group account, for example) level 4
01-4310-000 donated piano (detail account, for example) level 5

Note: the income account will close to unrestricted net assets, because you indicated that it is okay to sell the piano. If the donor requested that the piano not be sold, then the income account should be grouped under Permanently Restricted Income, and it should close to Permanently Restricted Net Assets

Then in Contributions, point a Contribution Fund number at those account numbers like this:

Contribution Fund 140 - Piano Donation
DB 01-1710-000 donated piano
CR 01-4310-000 donated piano

Awesome...I think I understand now...I will let you know if I have any more questions on this.

Thanks so much for your help. It is very much appreciated...

I will toss this idea out, but please verify, if you receive a non-cash donation under $2,000, you can accept it and give a tax deduction without verification. For a donation over $2,000, you need at least two appraisals in order to issue a tax deductible contribution statement. (can someone help me with a "yea" or "nea")

John,

According to Richard Hammar, if the donation of non-cash property is over $5,000, then an appraisal must be submitted. There are a number of requirements concerning the appraiser, etc. etc. Then the donor has to submit a Form 8283 and on and on. The church has a portion of the 8283 to fill out and they have to file a Form 8282 as well. Lots of requirements for these donations.

Awesome...I really appreciate all of your help on this.

Now, the question that I have is this: I purchased a laptop computer. How do I add this to our assets?

Thanks again...

Thanks, Bill, for clarification on the tax issue. I had the $2,000 stuck in my head, and my tax guide isn't readily available (read: I misplaced it).

Pastor David:

When you add a laptop or other items that depreciate, you should also have a depreciation schedule for these items.

For example, if you purchase a $1,000 laptop with a 5 year depreciation,
DB 01-1810-000 laptop $1,000
CR 01-1110-000 general checking $1,000

DB 01-5895-000 Equipment Depreciation $200.00
CR 01-1899-000 Accumulated Depr. Equipment $200.00

Again, I use the 5-year depreciation as an example. I have no idea what the GAAP depreciation time-frame is on a laptop.

Like Bill, I use the Richard Hammer Tax Guide. I highly recommend it. Now, if I could just find it.