CAP Documentation & Reporting 2

Question 1

Which IRS form must a donor obtain from a charity to deduct a cash contribution of $250 or more?

Accepted Answer

Written contemporaneous acknowledgment letter

Answer

For cash gifts of $250 or more, donors must obtain a written contemporaneous acknowledgment from the charity stating the amount and whether any goods or services were provided in exchange.

Question 2

A donor contributes a painting valued at $15,000 to a museum. Which additional form must the donor file with their tax return?

Accepted Answer

Form 8283 Section B

Answer

Non-cash contributions over $5,000 (other than publicly traded securities) require a qualified appraisal and IRS Form 8283 Section B, signed by an appraiser.

Question 3

What is the maximum number of years a private foundation must retain records related to grants and expenditures?

Accepted Answer

7 years

Answer

Private foundations generally must retain records for at least 7 years after the period to which they relate, consistent with IRS audit statutes.

Question 4

A charity receives a $500 donation and gives the donor a $50 dinner in return. What amount must the acknowledgment letter state as the deductible portion?

Accepted Answer

$450

Answer

The acknowledgment must disclose the fair market value of goods or services received; the deductible quid pro quo amount is $500 minus the $50 FMV of the dinner, equaling $450.

Question 5

Which document must accompany IRS Form 8283 Section B for a non-cash gift exceeding $5,000?

Accepted Answer

A qualified appraisal prepared by a qualified appraiser

Answer

A qualified appraisal conducted by a qualified appraiser no earlier than 60 days before the donation and no later than the tax return due date must accompany Form 8283 Section B.

(CAP) Certified Philanthropic Advisor Practice Test

(CAP) Certified Philanthropic Advisor Practice Test

CAP Documentation & Reporting 2