PD-1986-02

May 22, 1986

To: Vice Presidents, Deans, Directors and Department Chairs
From: President Gail Fullerton
Subject: Compliance with Gift Processing Provisions of the Federal Tax Reform Act of 1984

Background

The Federal Tax Reform Act of 1984 (the "Act") contains provisions which change the reporting requirements for persons making charitable contributions and for a donee organization which accepts noncash contributions. Accordingly, I have determined that the following procedures are necessary in order for the University to be in compliance with the Act.

Non-Cash Gift Processing

The Act requires a donee organization to process noncash gifts (equipment, supplies, software, patents, copyrights, nonpublicly held stock, books, artistic works, and real property) within certain time limits. Failure by either the donor or the donee organization to meet the documentation and submission deadlines of the Act may result in a disallowance of the donation by the Internal Revenue Service or an assessment of financial penalties against the donee organization.

In order to meet the various requirements of the Act, you and other University officials are responsible for assisting me in administering the gift regulations of the CSU Trustees and the Act.

Offer of Non-Cash Gift to the University

When a donor offers a noncash gift to the University, please contact the Director of Logistical Services (non-Library gifts) or the Director of the Library. They will assist you in preparing the necessary documentation required to accept the gift.

If the gift is valued at $500 or more, Part I of Form 8283 must be completed as illustrated on the attached sample. Please note that I will sign the Form.

The Director of Logistical Services or the Director of the Library will forward Form 8283 to the Director of Development for additional processing and preparation of my letter accepting the noncash gift on behalf of the Trustees as required by Section 42300 et seq., Title 5, Administrative Code.

When a noncash gift is valued at $5,000 or more, the donor must obtain, at his/her expense, an appraisal of the gift. The appraiser must complete Part III of Form 8283.

Form 8283 does not have to be completed when a donor offers nonpublicly traded stock whose current market value is $10,000 or less.

Sale of Gift

If the University sells the donor's noncash gift within two years after accepting it, the Director of Logistical Services must complete Treasury Form 8282, "Donee Information Return." Both the donor and the IRS must receive a copy of this Form. Please see the attached sample.

Completion of this document and its retention for IRS audit purposes will require the University to keep detailed information about when the noncash gift was sold, when the gift was contributed, exchanged or traded, and the amount received.

Summary

Compliance with the 1984 Federal Tax Reform Act will require your cooperation and willingness to provide complete information about the donor and the proposed noncash gift.

The Director of Development has overall responsibility for coordinating and interpreting the Federal Tax Reform Act's gift processing requirements.

Attachments