990-EZ Program Income

Practical and Practice issues for Professionals who practice in the area of taxation. Moral, social and economic issues relating to taxes, including international issues, the U.S. Internal Revenue Code, state tax issues, etc. Not for "tax protestor" issues, which should be posted in the "tax protestor" forum above. The advice or opinion given herein should not be relied on for any purpose whatsoever. Also examines cookie-cutter deals that have no economic substance but exist only to generate losses, as marketed by everybody from solo practitioner tax lawyers to the major accounting firms.
User avatar
webhick
Illuminati Obfuscation: Black Ops Div
Posts: 3868
Joined: Tue Jan 23, 2007 2:41 am

990-EZ Program Income

Postby webhick » Wed Aug 11, 2010 7:22 pm

Okay, so I'm filling out the 2009 990-EZ for the food pantry (yes, I filed an extension, and yes I really am that far behind). In 2008 I could blow over the Program Services Income question because we don't charge for anything, but 2009 is a bit different. We still don't charge anything, but we had to start a garden program. Nothing big, just someone donated about thirteen plants kind of late in the season and we ended up growing them in 5 gal containers in front of the pantry. This resulted in us harvesting about thirteen pounds of produce that got handed out at the pantry in place of canned food. Since the IRS wants us to value all incoming donations and estimate the cost of the stuff being handed out, I set up an cobbled-together inventory system in which I can maintain the item numbers and their price history using an ::ick:: Access database (I can explain this further, should anyone want to be bored to death on why it ended up being that way) and QB handles the inventory activity.

Now, when we purchase food, I just use the "Items" tab on QB to get the expense into inventory. When something is donated, I do roughly the same thing. The only real difference is that because there's no real expense to us, I zero out that expense by pushing it to our "Gifts in Kind" income account. This effectively adds the items to our inventory and records the total value of those goods to our income.

When we received produce from the garden, we had to log it into the system just like everything else with the only difference being that instead of pushing it to "Gifts in Kind", I pushed it to an "Internal" income account. Mostly because it's not really a donation and I knew there'd be a quiz later. Added bonus of doing this: we can tell if we earned a "profit" off the garden program -- (oh no!) ie. Did the value of our harvested produce exceed the costs of producing it.

So, I've got this piddly little amount in my Internal account and I'm not entirely sure where the hell to put it on the 990-EZ. I'm on the fence about whether it's one of those non-GAAP things that I have to exclude when filling out the 990-EZ or if I should report it under "Program Service Revenue" because, in some demented way, it's kind of like income we earned from the Garden Program. And while it's only a piddly amount for 2009, we've got close to 200 buckets this year and I've already harvested a lot of produce so the amount will be much bigger for 2010.
When chosen for jury duty, tell the judge "fortune cookie says guilty" - A fortune cookie

User avatar
Imalawman
Enchanted Consultant of the Red Stapler
Posts: 1808
Joined: Tue Sep 05, 2006 9:23 pm
Location: Formerly in a cubicle by the window where I could see the squirrels, and they were married.

Re: 990-EZ Program Income

Postby Imalawman » Thu Aug 12, 2010 2:34 pm

My thought is that it was donated to you and therefore, the value of the plants and the fruit thereof should be considered the donation; as such, I would record everything this year on line 1. If the organization purchases the plants in the coming year, then I think it would be considered program service revenue. At least, I think that's the way that I would handle it.
"Some people are like Slinkies ... not really good for anything, but you can't help smiling when you see one tumble down the stairs" - Unknown

User avatar
webhick
Illuminati Obfuscation: Black Ops Div
Posts: 3868
Joined: Tue Jan 23, 2007 2:41 am

Re: 990-EZ Program Income

Postby webhick » Thu Aug 12, 2010 10:24 pm

Imalawman wrote:My thought is that it was donated to you and therefore, the value of the plants and the fruit thereof should be considered the donation; as such, I would record everything this year on line 1. If the organization purchases the plants in the coming year, then I think it would be considered program service revenue. At least, I think that's the way that I would handle it.


Thank you so much for answering and it makes perfect sense. We've gotten a few donated this year as well as ones grown from seeds the pantry purchased, and I kind of can't figure out at this point which of the tomato and pepper plants were given to us. I may have to call it all Program Service Revenue this year and keep better track next year. At least the value of the plants were logged as they came in.

Thanks again!
When chosen for jury duty, tell the judge "fortune cookie says guilty" - A fortune cookie


Return to “Tax Practice & Policy and Tax Shelters”

Who is online

Users browsing this forum: No registered users and 1 guest