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Subject:  a few easy non-profit questions Date:  1/22/2005  4:00 PM
Author:  5000fingers Number:  75719 of 123001

I just started a small (and I mean small) non-profit performing arts organization. We did all of the rigamarole and got the 501(c)3, and it's up to me to keep the books (like just about everything else at this point).

Last year we had a guest performer, who ended up donating his $2,000 fee back to the organization. Actually we never wrote him a check, so it effectively was an in-kind donation (I think). Being at the very beginning stages of putting this together, I don't really know how to report this to the IRS, and can't find any quick answers to this question either by calling their 800 number or through their website. Our organization has an annual budget of no more than $9,000 at this point and has no 941 payroll expenses, if any of that is relevant. So the questions would be:

1. Since he donated his professional time & energy, is it an in-kind donation or was he just volunteering?
2. If it was an in-kind donation, do I need to report it, and if so, how?
3. If I send him a letter of thanks with the description and dollar value of his work, will he be able to deduct it, and if so, how? As a