How can nonprofits dispose of donated items?
A nonprofit hygiene bank classified under section 501(c)(3) of the Internal Revenue Code often rely on fundraising initiatives to sustain our operations.
On occasion, a nonprofit may be faced with the question, “Can I dispose, exchange, or sell this donated in-kind item?” If you follow the correct guidelines, yes!
While you may already be aware that there are specific filing requirements for nonprofits that receive charitable contributions in the form of donated property, if your organization wanted to sell, exchange, or dispose of donated property within three years of receiving it, you must file Form 8282, Donee Information Return, within 125 days of the disposition.
Exceptions to this filing requirement include:
property is valued at $500 or less
property is distributed for charitable purposes.
Understanding the guidelines surrounding in-kind donations is essential for nonprofit hygiene banks to navigate fundraising activities effectively and maintain compliance with IRS regulations.