In-Kind Donations: The Tax, Receipt, Accounting and Form 990 Rules

An in-kind donation is a gift of something other than money: goods, property, the free use of space or equipment, or professional services. They are sometimes called gifts in kind or noncash contributions. Four different sets of rules apply to the same gift, and most confusion comes from mixing them up: whether the donor can deduct it, what the charity’s receipt must say, how the charity records it in its accounts, and what it reports on Form 990. This page takes each in turn, with a table of common gifts, what the IRS data shows about who receives them, and a log you can copy.

What counts as an in-kind donation

The common types, and how each set of rules treats them:

The two rows people get wrong most often are space and services. A landlord who lets you use an office rent-free cannot deduct the rent they gave up, because the IRS treats the use of property as a partial interest; Publication 526 gives the example of letting a charity use the top floor of an office building. Yet the charity may still have to record the fair value of that free rent as revenue and expense in its financial statements. Likewise a volunteer cannot deduct the value of their time, but an accountant who does your audit for free may produce revenue in your accounts. The donor’s tax position and the charity’s accounts are separate questions.

Rule set 1: the donor’s deduction

For a donor who itemizes, the main points from IRS Publication 526 and the Form 8283 instructions:

• Time and services are never deductible. Publication 526 lists “the value of your time or services” among things you cannot deduct. A volunteer can deduct unreimbursed out-of-pocket costs of the service, including driving at 14 cents a mile.
• Property is deducted at fair market value, subject to percentage limits and special rules for some property types.
• Over $500 of noncash gifts in a year, the donor files Form 8283 with their return.
• Over $5,000 for an item or group of similar items (Section B), the donor needs a written qualified appraisal by a qualified appraiser, and the charity signs Part V of the form to confirm it received the property. Publicly traded securities are an exception and go in Section A at any value; see how to accept stock donations.
• Vehicles claimed at more than $500: the deduction is generally limited to what the charity sells it for, and the charity issues Form 1098-C, unless it uses the vehicle in its work, improves it materially, or gives or sells it to a person in need.

Signing Part V of Form 8283 does not mean the charity agrees with the donor’s value. It only confirms receipt. Never sign a form that states a value you know is wrong without saying so, and never appraise a donor’s gift for them; the appraiser must be independent.

Rule set 2: the receipt

For any single gift of $250 or more, the donor needs a written acknowledgment from the charity before they file. For noncash gifts, Publication 1771 says the acknowledgment must contain “a description (but not the fair market value)” of the property. Valuing it is the donor’s job. The receipt should also say whether the donor received anything in return, and if so, describe it with a good-faith estimate of its value. If a payment over $75 is partly a gift and partly for goods or services, a quid pro quo disclosure is required, with a penalty of $10 per contribution, up to $5,000 per event or mailing, for failing to give one.

Wording for noncash receipts, and the rest of the receipt rules, is in donation receipt templates. Thank the donor separately and warmly; a receipt is not a thank-you, and donation thank-you letters has wording for in-kind gifts.

Valuing an in-kind gift

Fair market value is, in the words of Publication 561, “the price that property would sell for on the open market” between a willing buyer and a willing seller who both know the relevant facts. The IRS accepts several ways of estimating it:

• Cost or selling price, for something recently bought in an arm’s-length sale.
• Comparable sales of similar items.
• Replacement cost, less wear.
• An appraiser’s opinion, required for high-value property.

For used clothing and household goods, Publication 561 says the price in thrift or consignment shops is an indication of value, and no deduction is allowed unless the item is in good used condition or better. New goods from a business are usually valued at what the business would sell them for, not the retail price on the label.

The charity values gifts for its own books too, at fair value under the accounting rules. Your figure does not have to match the donor’s, and often should not; record how you reached it.

Rule set 3: the charity’s accounts

Under US GAAP, contributed goods and the use of facilities are recorded as contribution revenue at fair value when received, with a matching expense or asset. Since FASB’s ASU 2020-07, which applies to annual periods beginning after 15 June 2021, nonprofits must:

• Show contributed nonfinancial assets as a separate line in the statement of activities, apart from cash and other financial gifts.
• Disclose by category: whether each type was used or sold (and in which programmes), the policy on selling rather than using, any donor restrictions, how they were valued, and the principal market used where a restriction prevents sale or use.

ASU 2020-07 changed presentation and disclosure only; the recognition rules did not change. For contributed services, those rules are strict. Services are recorded only if they either create or enhance a nonfinancial asset (a builder renovating your building), or require specialized skills, are provided by people with those skills, and would typically have to be bought if not donated (an accountant, a lawyer, a doctor, an architect), as PwC’s guide to ASC 958-605 sets out. General volunteering, such as staffing an event or sorting donations, is not recorded however valuable it is. That is why volunteer hours rarely appear in the accounts, and why you should count and thank them in other ways; see volunteer appreciation.

The statements themselves are explained in nonprofit financial statements, restrictions in net assets, and the accounts to post them to in the chart of accounts. Auditors check in-kind valuation closely; see nonprofit audit.

Rule set 4: Form 990

Form 990 has its own definitions, which differ from GAAP in one important way. According to the Form 990 instructions:

• Part IV line 29 is answered “Yes” if the organization received more than $25,000 in fair market value of noncash contributions, “regardless of the manner received (such as for use in a charity auction)”. A “Yes” means filing Schedule M. Contributions of services or the use of facilities are excluded.
• Part IV line 30 is “Yes” for any art, historical treasures, artifacts, scientific specimens or similar items, regardless of amount, or any qualified conservation contribution; these also go on Schedule M.
• Part VIII line 1 revenue may not include the value of donated services or the use of facilities, even though GAAP statements may. The difference is reconciled on Schedule D.

So a charity with free office space and pro bono accounting can have in-kind revenue in its audited accounts that never appears on its 990. Which form you file is covered in which Form 990, and the full return in the Form 990 guide.

Selling donated property: Form 8282

If you sell, exchange or otherwise dispose of property within three years of receiving it, and the donor reported it in Section B of Form 8283 (an item over $5,000), you must file Form 8282 with the IRS within 125 days of the disposal and give the donor a copy. The IRS uses it to compare the sale price with the donor’s claimed value. There are exceptions for items the donor valued at $500 or less and for property consumed or distributed for free in carrying out your purpose, such as medical supplies given out in a disaster. Very few charities file: in the 2024 Form 990 data, only 407 reported filing Forms 8282, for 4,899 forms between them. If you sell auction items, cars or art, check you are not one that should have.

Selling goods also raises its own questions about unrelated business income and sales tax; see can a nonprofit sell products. Items donated for an auction are covered in charity auctions.

Who receives large in-kind gifts

Form 990 Part IV line 29 gives a sector-wide picture. Across the 269,686 charities that filed the full Form 990 in the IRS’s 2024 extract, 30,013 (11.1%) received more than $25,000 of noncash gifts. The share climbs steeply with size:

By field, food banks and agricultural charities lead by a distance, as you would expect from donated food. Shares of filers in each NTEE major group reporting more than $25,000 of noncash gifts:

Our analysis of the IRS Statistics of Income Form 990 extract for 2024 filings, joined to the IRS Business Master File for each charity’s NTEE code (groups with at least 1,000 filers). Small charities filing Form 990-EZ or 990-N do not answer this question, so they are not included. Of the charities over the $25,000 line, 18.1% also reported selling inventory, which includes thrift shops selling donated goods.

When to say no: a gift acceptance policy

Not every in-kind gift helps. Used furniture you have to store, equipment that needs expensive servicing, a car that costs more to sell than it raises, or land with environmental problems can all cost more than they are worth. A short gift acceptance policy lets staff decline politely and consistently. It should say:

• What you accept, and what you do not (for example, no used mattresses, no vehicles, no real estate without board approval).
• Who can accept gifts above a set value, and when the board must approve.
• Whether you will sell gifts you cannot use, and that donors will be told.
• That the charity does not value gifts for donors’ tax purposes.
• How gifts with restrictions are handled.

Model policies are in nonprofit policy templates. Animal rescues and food programmes, which receive the most goods, also need a wish list so donors give what is actually needed; see how to start an animal rescue.

Asking for in-kind gifts

The best in-kind gifts are ones you would otherwise buy. Make a specific list: a laptop for the office, printing for the annual report, catering for an event, pro bono legal or accounting work. Businesses often find goods and services easier to give than cash; see companies that donate and, where the business wants recognition, corporate sponsorship. GivingTuesday is a good moment for a goods drive: GivingTuesday estimates 13.5 million Americans donated goods on the day in 2025; see GivingTuesday. More general asks are in how to get donations.

A simple in-kind gift log

Keep one log for every noncash gift, whatever the size. It supports the receipt, the accounts, Schedule M and any Form 8282, and auditors will ask for it. Most nonprofit accounting software and donor databases can hold these fields.

Where the figures come from

Tax rules are from IRS Publication 526 (2025), Publication 561 (December 2025), Publication 1771 (November 2023), the Form 8283 instructions (December 2025), Form 8282 (October 2021) and the 2025 Form 990 instructions. Accounting rules are from FASB Accounting Standards Update 2020-07, and the contributed services criteria from PwC’s not-for-profit guide, because the FASB Codification is not public. The data is our analysis of the IRS 2024 Form 990 extract with bin/analyse_soi_noncash.py. All read on 22 October 2026. This page explains the rules; it is not tax or accounting advice for a particular gift.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.