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What if I got some benefit from my donation, like a dinner, or a sports event?
When you donate money to a charity or other nonprofit organization, you usually write a check and don’t receive anything in return. When you’re ready to do your taxes, you add up the checks you wrote, and deduct the total on Schedule A.
Not all charitable deductions are that straightforward, however. If you get something out of the donation, like entertainment, or a meal, you may not be able to deduct the full donation. Here are the rules governing donations for
Charitable events
Tickets to athletic events
Membership in an organization that provides some benefits to you
Small token items
Your child’s school
Donations to Charitable Events
If you purchase tickets to an event held to benefit a particular charity or nonprofit organization, you can’t deduct the entire cost of the tickets because you receive something in return, such as dinner and entertainment. You can only deduct the amount that you paid that exceeds the value of the benefits you received in return. How can you estimate the benefit?
Charitable organizations often help you determine the value of the benefits you received by providing a receipt or acknowledgement identifying the value of the services you received for your donation.
Example: you purchase a $100 ticket to a dinner held to benefit your favorite charity. The ticket, letter, or other receipt given to you for your purchase indicates that the value of the dinner is $25 per ticket. You can deduct $75 per ticket ($100 - $25), meaning that your deduction for your contribution to this charity is $75 rather than the full $100 price of the ticket.
But what if you don’t go?
If you don’t attend the dinner, you still can deduct only the $75. But, if you pay for the tickets, then give the tickets back to the charity so they can resell them, you can deduct the full price of the tickets as your donation.
Tickets to Athletic Events
If you donate money to your local college and get the right to buy tickets to sports events at the college’s arena or stadium in return, you can deduct 80% of the donation as a charitable contribution. Note that this is only if you receive "the right to buy tickets", and not tickets themselves.
If you get tickets in return for your donation instead, you must deduct the cost of the tickets from the amount that you contributed in order to get the amount you can deduct.
Membership Benefits
If you pay fees or dues for membership in a nonprofit organization (other than a country club or one organized for social or civic purposes), you may receive certain benefits as a result of your membership. You don’t have to reduce your donation deduction by the cost of the benefits you receive if:
Your membership fees or dues are $75 or less annually. If you pay more than $75, you don’t have to reduce your donation deduction as long as you did not have to pay extra just to get those benefits.
The benefits you receive from the organization are rights or privileges such as:
- Free or discounted admission to facilities or events sponsored by the organization
- Free or discounted parking
- Preferred access to goods or services
- Discounts on the purchase of good and services
- Admission to member-only events where the cost per person is $7.40 or less
Small Token Items
If you make a donation and receive a small item or other benefit in return (like a lapel pin), you can still deduct your entire donation. The charity should tell you that you can deduct your payment in full. If in doubt, ask them.
Donations to your Child’s School
Tuition payments to your child’s private school aren’t deductible, but a donation to the school that is over and above your tuition payments may be deductible.
According to the IRS, you can deduct a donation to your child’s school if you meet all of these conditions:
Your donation was not a requirement for enrolling your child in the school,
You did not make the payment under a plan to convert tuition into charitable donations, and
Your child’s education was not dependent upon your donation.
Be careful with these requirements.
Example: Your child’s private school asks you to contribute an extra $200 for each child you have enrolled. They follow the request by saying that if you don’t make the contribution, you have to pay an extra $200 in tuition, or your child can’t attend the school. Fairness aside, that $200 is considered tuition, not a donation.
On the other hand, if your child’s school solicits contributions all the time, not just at the time of enrollment, and the contribution is completely voluntary, you can deduct your contribution.
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