Prohibited Inkind Contributions for Allocable Activities

The FEC Form 3x allows for Prohibited Inkind Contributions for Allocable Activities. This is when an Inkind contribution, which typically would not be permissible due to FEC regulations, is accepted by the Non-Federal account, and the federal account pays for its share.

The FEC is expecting 3 transactions on the report for each of these Inkinds:

1. On the H3, an allocation transfer from Non-Federal to Federal
2. On the H4, a 100% Non-Federal Use of Prohibited Inkind Contribution
3. On the H4, a 100% Federal Share of Prohibited Inkind Contribution

To do this in ISP, there are 3 data entry steps you need to take.

Prior to adding the transaction, if you haven’t already, first create the appropriate allocation.

Next, add an Inkind contribution associated with the Non-Federal filer using the appropriate allocation.

Finally, add an Allocation Transfer from the Federal Account to the Non-Federal Account associated with the same allocation as the Inkind in the amount of the Federal Share of the Inkind transaction amount. Using a simple example, if the allocation ratio is 50%, and the Inkind is for $1000, the Allocation Transfer from Federal to Non-Federal would be for $500.

On the Form 3X, the Inkind contribution is reported twice: once on the H3 as a Transfer From Non-Federal to Federal and again on the H4 as the 100% Non-Federal Use of Prohibited Inkind Contribution.  (All Inkind contributions are reported twice, both as a receipt and a disbursement, so as to not impact the cash on hand.)

The allocation transfer of the Federal share will appear on the H4, as the 100% Federal Share of Prohibited Inkind Contribution.