I'll chime in and second JHB. We have an old popcorn machine plus lots of the same kind of stuff described above. I didn't list any other assets on our 990EZ, not even the old popcorn popper. Remember that the IRS creates the policies and forms to apply to all kinds of non-profit charities, many of which are much bigger and more complex than the typical PTO. Keep it simple. Your PTO officers and the IRS prefer it that way. And, like JHB said, if anyone is ever unsure of IRS policy, CALL THEM directly. The reps have an undeserved bad reputation -- I have called many times and get good advice from knowledgable people. You don't have to be an officer or the treasurer to call. I wish I had the non-profit help line memorized, but maybe Tim can post it in the Useful Resources page (if it's not already there).

[ 01-19-2005, 10:38 AM: Message edited by: Critter ]

Whoever is working on that should call and have a chat with the IRS - because if that's the reason, you are doing a whole lot of unnecessary work.

Let's keep in mind that I'm not an accountant, but I have had a reasonable amount of business experience, including filing the PTO's taxes.

First all perspective. Do you really think the IRS wants you counting and valuing decorations and hula hoops ?

On the Balance sheet portion of the 990EZ which asks about assets, they are referring to stuff like expensive equipment, cars, computers, etc. There are specific rules for declaring and depreciating such assets. I think it might also include Accounts Receivables - such as if you are waiting on a proceeds check from a fundraiser.

I would wager almost nothing you've listed should be included in the statement of "assets" that the IRS wants.

You might have another reason (internally) to inventory and track that stuff, but - in my opinion - it's way overkill to do it for the IRS return.

Suggest your treasurer call the IRS and get a clarification. They are very helpful about stuff like this.

Let's get some others to chime in. Do any of you list any assets besides your bank balance?

[ 01-19-2005, 10:18 AM: Message edited by: JHB ]

For the past couple of weeks, some of us have been going through everything in the storage facility for inventory purposes, for the IRS. We were also asked to put down a value for each item, also for the IRS. We were told that this list would have to be updated and turned in to the IRS every year. I am now wondering if this is true. I haven't read this anywhere, we have been following instructions from those in our group who have been collecting the tax exempt information from the IRS. I'm not sure what to do!

It doesn't sound like much reason to claim those items as belonging to the PTO. But regardless, owning them won't have an impact on your annual tax filings. You don't list your assets each year, but only income from the assets. Unless you are renting those items out or selling them - they aren't producing income.

Assets are things that are used in your business, have a life of at least one year, and wear out or get used up over time. Some of what you've mentioned would technically be "supplies". They'd just be lumped in with all the other expenses for a given year.

You'd only count the bigger items you listed as true assets (like equipment or maybe your props).

The point is - most of it would never be an issue on taxes because 1) they aren't assets and 2) they aren't producing any income.

[ 01-18-2005, 04:07 PM: Message edited by: JHB ]

Our PTO owns a few big items, like you mentioned, but also lots of smaller items, like balls and hula hoops that are used in P.E. and at recess, various props for plays (some of these are historical reproductions and are used in classrooms), decorations for different holidays, etc. It is all the little things that I think would make the annual reporting of assets and their worth a nightmare. We are constantly buying new things, which means our list of assets and their worth changes often. I think it would be easier for all volunteers concerned if we just donated all of these things instead of trying to call it PTO property. I thought it might also be to the advantage of the PTO, for tax exempt purposes, if we kept our assets to a minimum. Those are just my thoughts, though. I was hoping to hear the voice of experience on this.

Usually, most PTO's don't really own that much in the way of true assets.

Unless it's an income producing asset (like if you routinely rented out your popcorn machine) or unless you sell it, I don't see where an asset would affect your yearly tax return.

But if it's something the school uses exclusively - why not just donate it? One thing to consider is liability and upkeep. If it breaks, who will have to fix it? WILL it be fixed? Who's responsible for making sure it's kept in good order so there's no danger (like a frayed electrical cord)?

For us, we try to keep it as simple as possible and donate everything to the school.

About the only exception is our popcorn, snowcone, and cotten candy machines. Technically those belong to the PTO. As closely as we work together, it really doesn't matter too much to us - but the principal prefers it that way so she doesn't have to deal with requests to borrow them.

Frankly, it's a pain to loan out this equipment and it's easier for the PTO to say "no" than for a school official where everything at the school is seen as public property by some.

We have a cabinet with some supplies like colored paper. But beside the concessions equipment, we don't have any tangible assets.