User Support Forum

I am setting up the Chart of Accounts for the first time, and am new to accounting and to PowerChurch.
A lady in our church bought a rocking chair for the nursery, and would like it to show on her year-end tax statement. It seems to me, if I enter it as a contribution it will show as money, which then would need to be deposited at the bank. Otherwise, our balance would be off in the reports.
Can you advise on what to do with it? This is probably the wrong place to ask, but it's probably an easy answer for an experienced church accountant. In the past, I have used a checkbook program and spreadsheets to do our accounting, and I could easily just type in a line for
in-kind contributions, but now I have to adhere to accounting principles, and well, I'm learning.
Thanks for any help

BroDave wrote:I am setting up the Chart of Accounts for the first time, and am new to accounting and to PowerChurch.
A lady in our church bought a rocking chair for the nursery, and would like it to show on her year-end tax statement. It seems to me, if I enter it as a contribution it will show as money, which then would need to be deposited at the bank. Otherwise, our balance would be off in the reports.
Can you advise on what to do with it? This is probably the wrong place to ask, but it's probably an easy answer for an experienced church accountant. In the past, I have used a checkbook program and spreadsheets to do our accounting, and I could easily just type in a line for
in-kind contributions, but now I have to adhere to accounting principles, and well, I'm learning.
Thanks for any help

There are a number of ways to handle this. What we do at our church, is issue a thank you on church letterhead, listing the donation, and the estimated amount for the item. In the body of the letter, we make note that this is a non-cash donation, and as such must be shown as such on their income tax.

However, there is a way to show this on the statement and not affect funds accounting, this knowledgebase article gives you an idea on how to do that:

https://www.powerchurch.com/support/153 ... tributions

Do note the recommendation to post these types of transactions separately from other transactions. In fact, its probably best to post these using the Post to Contributions Only posting option.

Thank you so much for your rapid response. I am still setting up the Chart of Accounts, and I was stuck.

BroDave wrote:Thank you so much for your rapid response. I am still setting up the Chart of Accounts, and I was stuck.

Well, the question is more a Contributions question and not accounting, so you really don't need to worry about such donations unless its something that is done a lot, and if so, that is something that needs to be addressed by the church board as such donations can actually take away from contributions that could have been made to support needed purchases; not saying that the chair was not needed, but such giving can go overboard.

NeilZ wrote:
There are a number of ways to handle this. What we do at our church, is issue a thank you on church letterhead, listing the donation, and the estimated amount for the item. In the body of the letter, we make note that this is a non-cash donation, and as such must be shown as such on their income tax.

Our CPA says that according to IRS rules, the church is not to put an "Estimate Amount" on the statement. That is for the donor to decide. If you give a donation to Waterfront Mission or Goodwill for example, they leave out the estimate.

jwdick wrote:

NeilZ wrote:
There are a number of ways to handle this. What we do at our church, is issue a thank you on church letterhead, listing the donation, and the estimated amount for the item. In the body of the letter, we make note that this is a non-cash donation, and as such must be shown as such on their income tax.

Our CPA says that according to IRS rules, the church is not to put an "Estimate Amount" on the statement. That is for the donor to decide. If you give a donation to Waterfront Mission or Goodwill for example, they leave out the estimate.

That is true, but when they give you the receipt you have a number, and we attach a copy of that receipt to the letter, which appeared to be the case with this question.

In any case, we follow the advice given in IRS Publication 1828, it covers most areas of federal tax requirements for churches.

Thank you all for your replies! I am having trouble keeping the "sides of the equation" clear in my head. As I told one of my friends, " Sometimes, I think I know exactly what I'm doing - and then I don't.."

I do want to keep the Chart of Accounts clean and clear. I was using our old contribution categories to help set it up, but that may be causing too much confusion. I have the categories I use in Quicken, which are more on the side of accounting, so I will use those, but I still have changes to make, because I didn't understand even as much as I do now about accounting principles when I set up and used Quicken.