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treatment of lease payments

  • 1.  treatment of lease payments

    Posted 24 days ago

    The Rutgers University Foundation became fractional owners, via a donation, of land that is subject to a long term lease.  The question has arisen about how to account for quarterly lease payments that we are receiving as part of the lease.  Are these additional gifts that would be tied to the property donation, and thus added to the donor's giving history?  Or simply lease income (non-gift) since the value of the gift was accounted for in the original property donation.  I didn't see this particular scenario addressed in CASE standards.  I'd appreciate guidance from the group.  Thank you!    Chris


    Christopher P. Zraly, CPA

    Chief Financial Officer

    Rutgers University Foundation

    335 George Street, 4th Floor

    New Brunswick, New Jersey 08901

    Tel: 848-932-7372 

    Cell: 732-991-4749


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  • 2.  RE: treatment of lease payments

    Posted 24 days ago
    Your "gift" was the appraised value of your fractional ownership at the time of the gift.  The payments coming in is income - likely taxable as unrelated business income.

    Think of it as you would a gift of securities.  You value and count the stock that was donated - not the dividends based on your ownership.


    John H. Taylor
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987

  • 3.  RE: treatment of lease payments

    Posted 23 days ago
    Thanks John.  I was thinking the same thing.  Thanks for confirming.  Chris

    Christopher Zraly
    Chief Financial Officer
    Rutgers University Foundation