IRS Form 990 (Schedule M) – IRS Form 990 (Schedule M) – Noncash Contributions – In the world of tax-exempt organizations, accurate reporting of donations is crucial for maintaining compliance and transparency. One key aspect involves noncash contributions, which are reported using IRS Form 990 Schedule M. This schedule helps nonprofits detail gifts like property, goods, or intellectual assets, ensuring the IRS has a clear picture of an organization’s support. Whether you’re a charity, foundation, or other exempt entity, understanding Schedule M can prevent filing errors and support better donor relations. In this article, we’ll break down what Schedule M entails, who needs to file it, how to complete it, and more—using insights from official IRS guidelines and expert resources.
What Is IRS Form 990 Schedule M?
IRS Form 990 Schedule M, titled “Noncash Contributions,” is an attachment to Form 990 (Return of Organization Exempt from Income Tax). It’s designed for tax-exempt organizations to report the types of noncash donations received during the tax year, along with related details such as quantities, values, and valuation methods. Noncash contributions include items like art, vehicles, real estate, securities, and more—but exclude services, volunteer time, or the use of facilities.
The purpose of Schedule M is to provide transparency on how nonprofits receive and value in-kind support, which can significantly impact their financial statements. For instance, it requires reporting even if items were sold immediately after receipt, but not contributions from prior years. This schedule is essential for organizations that rely on diverse donation types beyond cash, helping the IRS monitor compliance with charitable contribution rules.
Who Must File Schedule M?
Not every organization filing Form 990 needs Schedule M. Filing is required if:
- The organization reported more than $25,000 in aggregate noncash contributions on Form 990, Part VIII, line 1g.
- It received contributions of art, historical treasures, qualified intellectual property, or qualified conservation contributions—regardless of value.
- The answer is “Yes” to Form 990, Part IV, lines 29 or 30.
Tax-exempt entities like 501(c)(3) charities, private foundations, and other nonprofits under section 501 must check these thresholds. If your total noncash donations exceed $25,000 or include specific items like artworks or conservation easements, Schedule M is mandatory. Note that donations of services or facility use aren’t reportable here, as they don’t qualify as noncash property.
Understanding Noncash Contributions
Noncash contributions, often called in-kind donations, encompass a wide range of assets donated to nonprofits without cash exchange. Common examples include:
- Art and Collectibles: Paintings, sculptures, historical artifacts, or stamps.
- Vehicles and Real Estate: Cars, boats, residential or commercial properties.
- Securities: Publicly traded stocks, closely held shares, or partnership interests.
- Other Items: Books, clothing, food inventory, medical supplies, or intellectual property like patents.
These must be valued at fair market value (FMV) at the time of donation, and organizations should use methods like appraisals, sales of comparable items, or expert opinions. Importantly, substandard items (e.g., poor-condition clothing) may need to be categorized as “Other,” and certain contributions require additional forms like IRS Form 8283 for donations over $500 or Form 1098-C for vehicles.
How to Complete IRS Form 990 Schedule M?
Schedule M is divided into two parts: Part I for detailing property types and Part II for supplemental information. Here’s a step-by-step overview based on the form’s structure.
Part I: Types of Property
This section lists 28 specific categories of noncash property (lines 1–28), plus space for “Other” items. For each applicable type:
- Column (a): Check if received.
- Column (b): Number of contributions or items (e.g., each separate stock gift counts as one).
- Column (c): Contribution amount reported on Form 990, Part VIII, line 1g.
- Column (d): Valuation method (e.g., cost, selling price, appraisal).
Key lines include:
- Line 1–3: Art (works, historical treasures, fractional interests).
- Line 6–7: Vehicles, boats, and planes.
- Line 9–12: Various securities.
- Line 13–14: Qualified conservation contributions.
- Line 15–17: Real estate types.
- Line 18–24: Collectibles, food, drugs, taxidermy, artifacts, etc.
- Lines 25–28: Other non-listed items.
Additional questions:
- Line 29: Number of Forms 8283 received and acknowledged.
- Line 30a–b: If property must be held for 3+ years (describe arrangements in Part II).
- Line 31: Gift acceptance policy for nonstandard contributions.
- Line 32a–b: Use of third parties for processing/selling (describe in Part II).
- Line 33: Explain if no revenue reported for a checked type (in Part II).
Part II: Supplemental Information
Use this narrative section to provide details referenced in Part I, such as explanations for column (b) counts, third-party arrangements, or why no revenue was reported. Reference specific line numbers and duplicate as needed for space.
Valuation and Reporting Best Practices
Valuing noncash contributions accurately is vital to avoid IRS scrutiny. Common methods include:
- Fair Market Value (FMV): Based on what a willing buyer would pay.
- Appraisals: Required for items over $5,000 (qualified appraisals for Form 8283).
- Sales Data: For publicly traded securities or comparable properties.
Nonprofits should maintain records like donor receipts, appraisals, and Forms 8283/8282 (if selling donated property within 3 years). Report all qualifying donations, even if sold quickly, but exclude prior-year items or non-property gifts.
Common Mistakes to Avoid When Filing Schedule M
Filing errors can lead to delays or penalties. Watch out for:
- Underreporting values or omitting categories (e.g., forgetting “Other” for miscellaneous items).
- Incorrect valuation methods—always document how values were determined.
- Failing to file if under $25,000 but receiving art or conservation items.
- Not completing Part II for required explanations.
- Ignoring related forms like 1098-C for vehicles or 8899 for intellectual property.
Experts recommend reviewing your gift acceptance policy annually and consulting a tax professional for complex donations.
Where to Download IRS Form 990 Schedule M?
To get started, download the latest version of Schedule M directly from the IRS website. The current PDF for tax year 2025 (applicable for filings in 2026) is available here: https://www.irs.gov/pub/irs-pdf/f990sm.pdf. Always check the IRS site for updates, as forms can change annually.
Conclusion
Mastering IRS Form 990 Schedule M ensures your nonprofit stays compliant while maximizing the benefits of noncash contributions. By accurately reporting these donations, organizations demonstrate transparency and build donor trust. If your entity receives significant in-kind support, prioritize understanding this schedule—consult IRS resources or a CPA for personalized advice. Staying informed helps nonprofits focus on their mission without tax hurdles.