Thursday, May 24, 2012
In a recent tax court ruling, a Texas couple’s deduction of $25,171 in gifts to their church was denied because the acknowledgement sent by their church following the gift lacked a statement specifying whether any goods or services were provided in consideration for the contributions. The couple had made numerous gifts by check during the tax year, and most were above $250.
Section 170(f)(8)(A) of the Internal Revenue Code provides: “No deduction shall be allowed under subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph (B).” Paragraph B specifies that the donee’s written acknowledgment must: (1) state the amount contributed, (2) indicate whether the donee organization provided any goods or services in consideration for the contribution, and (3) provide a description and good faith estimate of the value of any goods or services provided by the donee organization (if any).
Note that the acknowledgement must be contemporaneous (reasonably close in time to the donation).
The couple produced cancelled checks supporting the donations and a letter from the church acknowledging the total contribution for the year. The letter did not, however, contain a statement that the couple received no goods or services in return for their donations. A second letter produced by the church (that included the statement but dated more than a year later) was not considered by the Tax Court.
Tax Lesson For The Day
If you make a charitable contribution of $250 or more, make sure the acknowledgement you receive from the charity contains the statements specified in IRC Section 170(f)(8). If not, ask the charity to send a revised letter dated the same as the original, with the required information.
For example, the printed materials detailing ticket and table levels for the 2012 Friends Gala contain a statement that in return for table and ticket donations, the organization will provide goods and services to the donors of $75 per seat, regardless of the level of their donation. This is the organization’s estimate of the fair market value of the meal, entertainment, etc., enjoyed by Gala attendees. The amount contributed in excess of $75 per seat is deductible by the donor. If donors indicate that theirs is a “donation only” – with no intention of attending the Gala – the entire gift should be deductible.
Of course, the above example is for illustration only, and not intended as tax advice.
To read the Tax Court ruling in the case described, click this link.
November 23, 2013
Since its founding in 1997, Golfers Against Cancer has had one goal: to fund cancer research. Virtually all the money raised in GAC tournaments and events goes directly to cancer research organizations, including the CHRISTUS Stehlin Foundation.
August 2, 2013
The 14th Annual Luci Bonneau Memorial Striking Against Breast Cancer Mixed Doubles Bowling Tournament is one of the most prestigious doubles events in America. The tournament includes a Pro-Am - your chance to bowl with the pros to cure breast cancer!
October 19, 2013 | 7:00 p.m.
Get ready to disco and dance the night away at The Friends of CHRISTUS Stehlin Gala! Premiering “STAYIN’ ALIVE,” The Greatest Bee Gees Tribute Band with Members of the Houston Symphony Orchestra and America’s first Mash Up Group, “THE COMPANY MEN.”
May 4, 2013
On May 4th, 2013, young women will take the field for the first time in an exciting powder puff football game with teams comprised of some of best and brightest in Austin. The game is designed to bring the passion and spirit of young community leaders together to support Young Texans Against Cancer.
“We don't treat cancer. Cancer is a thing. We treat the frightened human being who has cancer. Fear is an inherent feature of cancer, and there is only one antidote - Hope.”
Dr. John Stehlin,
CHRISTUS Stehlin Foundation for Cancer Research will join CHRISTUS St. Catherine and CHRISTUS St. John in a new partnership with Houston Methodist.
There are currently 13.7 million cancer survivors in the United States and the number is expected to rise by 31 percent to 18 million by 2022, according to a new report. >> Click article title for more.