Form 990 Schedule M Instructions: Noncash Contributions Reporting

The instructions for Form 990 Schedule M require any full Form 990 filer to complete the schedule when noncash contributions exceeded $25,000 during the tax year, or when the organization received any art, historical treasures, or qualified conservation contributions regardless of value. Schedule M breaks those donations down by property type, records how each category was valued, and flags transactions the IRS watches closely. The form itself is short. Getting the numbers to tie to the rest of the return is where organizations trip.

Who Must File Schedule M

Schedule M attaches only to the full Form 990. Organizations filing Form 990-EZ or Form 990-PF do not file it.¹

For Form 990 filers, two triggers make the schedule mandatory. The first is a dollar threshold: total noncash contributions reported on Form 990, Part VIII, line 1g exceeded $25,000. The second ignores dollar amounts entirely. If the organization received any contributions of art, historical treasures, or qualified conservation contributions during the year, Schedule M is required no matter how small the value.¹

These triggers match Form 990, Part IV, lines 29 and 30. A “Yes” answer on either line means Schedule M must be attached.

Completing Part I: The Property Category Table

Part I lists 28 categories of property on lines 1 through 28. The organization checks off each type it received during the year and fills in four columns for that row.

The most commonly used lines include:

Lines 1–3: Art, historical treasures, and fractional interests
Line 5: Clothing and household goods
Lines 6–7: Cars and other vehicles; boats and planes
Lines 9–12: Securities (publicly traded, closely held stock, partnership or LLC interests, miscellaneous)
Lines 13–14: Qualified conservation contributions
Lines 15–17: Real estate (residential, commercial, other)
Line 19: Food inventory

The remaining lines cover more specialized property: taxidermy, archeological artifacts, scientific specimens, and four “Other” lines for anything not covered elsewhere.¹

For each property type checked, complete the four columns:

Column (a): Check the box to indicate the organization received that property type.
Column (b): Enter the number of contributions or items received, based on the organization’s recordkeeping practices.
Column (c): Enter the revenue amount reported for that property type on Form 990, Part VIII, line 1g. If none was reported, enter zero.
Column (d): Describe the valuation method, such as quoted market prices, appraisal, comparable sales, or cost.¹

Column (c) has to tie back to Form 990, Part VIII, line 1g. Mismatches are one of the easiest things for the IRS to flag electronically, so reconcile the numbers before filing.

Fair Market Value and How to Report the Method

Every figure in Column (c) depends on fair market value. The IRS defines fair market value as the price property would sell for on the open market between a willing buyer and a willing seller, with neither party forced to act and both having reasonable knowledge of the relevant facts.²

How you get there depends on the property:

Publicly traded securities: Take the average of the highest and lowest quoted selling prices on the date of contribution. If the high was $50 and the low was $46, fair market value is $48 per share.²
Real estate, closely held stock, and other complex property: Use sales of comparable properties, replacement cost, or expert opinions. When a donor claims a deduction of more than $5,000 for a single item or group of similar items (excluding publicly traded securities), a qualified appraisal is required.³
Vehicles, boats, and airplanes: Valuation often depends on whether the organization sells the item or uses it. Special reporting rules under Form 1098-C apply when the claimed value exceeds $500.

Whichever method you use, record it. Column (d) requires that description for each property type checked.

Lines 29 Through 33: The Follow-Up Questions

After the category table, Part I asks yes-or-no questions that catch situations the IRS wants explained.

Line 29 asks whether the organization received more than $25,000 in noncash contributions from any single donor. This flags large gifts for closer scrutiny.
Line 30a asks whether the organization received property it must hold for at least three years from the contribution date and that need not be used for exempt purposes during the entire holding period. A “Yes” requires an explanation in Part II.¹
Line 31 asks whether the organization has a gift acceptance policy that requires review of nonstandard contributions. A nonstandard contribution is an item not reasonably expected to further the exempt purposes, where there is no ready market to convert it to cash or the value is highly speculative.¹
Line 32a asks whether the organization uses third parties or related organizations to solicit, process, or sell noncash contributions. A “Yes” requires a description in Part II.
Line 33 requires an explanation in Part II whenever the organization checked Column (a) for a property type but reported zero revenue in Column (c).

Answering “No” to line 31 is not penalized, but a written gift acceptance policy protects the organization from taking in donations it cannot use, store, or sell. If unusual property comes in regularly, having a policy in place before the next return is the practical move.

When Part II Is Required

Part II is a free-text section for narrative explanations triggered by Part I. At a minimum, the organization must state in Part II whether Column (b) reports the number of contributions, the number of items received, or a combination of both.¹

Beyond that baseline, Part II is required when:

The organization answered “Yes” to line 30a (three-year holding arrangements)
The organization answered “Yes” to line 32a (third parties handling noncash contributions)
The organization checked a property type in Column (a) but reported no revenue in Column (c)

Museums that follow ASC 958-360-25 and do not capitalize their collections can also use Part II to explain zero revenue reported on Form 990, Part VIII, line 1g for donated items.¹

Related Forms the Organization Cannot Ignore

Schedule M does not stand alone. Several related obligations feed the same compliance picture, and gaps in those obligations weaken any defense of the schedule if questions arise.

Form 8283 Donee Acknowledgment

When a donor contributes property worth more than $5,000 (other than publicly traded securities), the donor files Form 8283 with their own return. An authorized official of the receiving organization must sign Part V of that form, the Donee Acknowledgment, confirming receipt. The organization returns the form to the donor and keeps a copy.³

Written Acknowledgments for Gifts of $250 or More

For any noncash contribution of $250 or more, provide the donor with a contemporaneous written acknowledgment. It must include the organization’s name, a description (but not the value) of the property, and a statement about whether the organization provided any goods or services in return.⁴

Form 8282 When Property Is Disposed Of

Accepting a noncash contribution creates an ongoing tracking obligation. If the organization sells, exchanges, or otherwise disposes of donated property within three years of receipt, and that property had an appraised value of more than $5,000 at donation, the organization files Form 8282 with the IRS.⁵ A copy goes to the original donor within 125 days of the disposition.⁶

Two exceptions apply. Form 8282 is not required if the donor signed a statement on Form 8283 certifying that the specific item’s appraised value was $500 or less. It is also not required when the donated item was consumed or distributed without consideration in carrying out the organization’s exempt purpose, such as medical supplies used by a relief organization aiding disaster victims.⁵

Form 1098-C for Vehicles, Boats, and Airplanes

Donations of motor vehicles, boats, and airplanes with a claimed value of more than $500 require Form 1098-C and a contemporaneous written acknowledgment to the donor.⁷

The acknowledgment deadline depends on what the organization does with the property. If it sells the vehicle, the acknowledgment must reach the donor within 30 days of the sale and must include gross sale proceeds. If the organization keeps or significantly improves the vehicle rather than selling it, the acknowledgment is due within 30 days of the contribution date.⁷

Penalties for a Missing or Incomplete Schedule M

Schedule M is part of Form 990. The IRS treats a missing or incomplete schedule the same way it treats a deficient return. The base statutory penalty is $20 per day the failure continues, capped at the lesser of $10,000 or 5% of the organization’s gross receipts for the year. Organizations with gross receipts over $1,000,000 face $100 per day, capped at $50,000. Both figures adjust annually for inflation.⁸

The penalty applies whether the return is late, incomplete, or both. Omitting Schedule M when it is required counts as filing an incomplete return.⁹

An organization with a legitimate reason for the failure can request penalty abatement for reasonable cause. The request is a written statement, attached to the Form 990 and signed under penalties of perjury, explaining what prevented compliance, why the organization was not negligent, and what steps have been taken to prevent a recurrence. Supporting documentation helps.⁹

1
Internal Revenue Service. Instructions for Form 990 Schedule M
2
Internal Revenue Service. Publication 561 – Determining the Value of Donated Property
3
Internal Revenue Service. Instructions for Form 8283
4
Internal Revenue Service. Charitable Contributions – Written Acknowledgments
5
Internal Revenue Service. Form 8282 – Donee Information Return
6
Internal Revenue Service. Return Due Dates – Other Returns and Reports Filed by Exempt Organizations
7
Internal Revenue Service. Instructions for Form 1098-C – Contributions of Motor Vehicles, Boats, and Airplanes
8
Office of the Law Revision Counsel. 26 USC 6652 – Failure to File Certain Information Returns
9
Internal Revenue Service. Exempt Organizations Annual Reporting Requirements – Filing Procedures: Abatement of Late Filing Penalties