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April 11, 2024
Question

Experiences and auction items as in-kind donations

  • April 11, 2024
  • 1 reply
  • 0 views

My non-profit organization received contributions to be sold by silent auction. The majority of these were experiences, like a free cooking class, free dinner at a restaurant, or free tickets to an event. I’m wondering how to account for these in QBO, if at all. I wouldn’t think these are classified as goods (except maybe the free tickets) or services, which is how I’ve seen in-kind donations defined. If they don't fall under that definition, I would think that they just wouldn't be accounted for. On the other hand, I feel like the payments we received for these goods from the auction winners should be offset by the donation and selling of the goods themselves, meaning they would have to be reported.

 

Additionally, I saw online that in-kind donations are only in-kind donations if they are things you would usually purchase in the course of business. Because these were auction items, none of them would be things we normally acquire/need in the course of business, including the items that were clearly goods or services like gift cards and merchandise.

 

So, basically, do I put donated auction items into QBO? Does that include donated experience auction items? And how do I offset whichever contributions are reported against the payment we received for them from the auction? Thanks.

1 reply

Rainflurry
April 12, 2024

@cmizz1 

 

You don't need to record the donation of in-kind-services (classes, dinner, tickets), only the amount you receive at the auction for those services.  You do need to record in-kind donations of property at fair market value (FMV).  It's up to you to determine the FMV of any in-kind donation of property received.  The FMV is income when received without restriction.  When you sell the property, the FMV of the property should be a reduction in the asset value (it is an asset when received, therefore a reduction in the asset when sold) and any markup is income.