I donated $1500 this year to the football program. One of the selling points was that I would see about 1/3 of it back in my tax return. When I type it into Turbotax I see a small bump back ($40) am I doing something wrong.
FB Donation and Taxes
- Thread starter nemosgold
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Ski U Mah Gopher
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If your donations was in return for buying FB tickets, 80% of the donation is deductible.
From the IRS Website:
Contributions From Which You Benefit
If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later.
If you pay more than fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. For the excess amount to qualify, you must pay it with the intent to make a charitable contribution.
Example 1.
You pay $65 for a ticket to a dinner-dance at a church. All the proceeds of the function go to the church. The ticket to the dinner-dance has a fair market value of $25. When you buy your ticket, you know that its value is less than your payment. To figure the amount of your charitable contribution, you subtract the value of the benefit you receive ($25) from your total payment ($65). You can deduct $40 as a charitable contribution to the church.
Example 2.
At a fund-raising auction conducted by a charity, you pay $600 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable contribution.
Athletic events. If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution.
If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. In that case, subtract the price of the tickets from your payment. 80% of the remaining amount is a charitable contribution.
Example 1.
You pay $300 a year for membership in an athletic scholarship program maintained by a university (a qualified organization). The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. You can deduct $240 (80% of $300) as a charitable contribution.
Example 2.
The facts are the same as in Example 1 except that your $300 payment included the purchase of one season ticket for the stated ticket price of $120. You must subtract the usual price of a ticket ($120) from your $300 payment. The result is $180. Your deductible charitable contribution is $144 (80% of $180).
From the IRS Website:
Contributions From Which You Benefit
If you receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you receive. Also see Contributions From Which You Benefit under Contributions You Cannot Deduct, later.
If you pay more than fair market value to a qualified organization for merchandise, goods, or services, the amount you pay that is more than the value of the item can be a charitable contribution. For the excess amount to qualify, you must pay it with the intent to make a charitable contribution.
Example 1.
You pay $65 for a ticket to a dinner-dance at a church. All the proceeds of the function go to the church. The ticket to the dinner-dance has a fair market value of $25. When you buy your ticket, you know that its value is less than your payment. To figure the amount of your charitable contribution, you subtract the value of the benefit you receive ($25) from your total payment ($65). You can deduct $40 as a charitable contribution to the church.
Example 2.
At a fund-raising auction conducted by a charity, you pay $600 for a week's stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable contribution.
Athletic events. If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution.
If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. In that case, subtract the price of the tickets from your payment. 80% of the remaining amount is a charitable contribution.
Example 1.
You pay $300 a year for membership in an athletic scholarship program maintained by a university (a qualified organization). The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. You can deduct $240 (80% of $300) as a charitable contribution.
Example 2.
The facts are the same as in Example 1 except that your $300 payment included the purchase of one season ticket for the stated ticket price of $120. You must subtract the usual price of a ticket ($120) from your $300 payment. The result is $180. Your deductible charitable contribution is $144 (80% of $180).
I gotta believe it's only a matter of time before the IRS kills this deduction. It really is a crock. In general, the underlying notion is simply that you get to deduct the portion for which you do not receive anything in return (the TRUE charitable contribution). Clearly a seat license gets you something of value. To say the fair market value of a seat on the 50 yard line is the same as one in the endzone is preposterous.
Tax geeks shake their heads at this one all the time...
Tax geeks shake their heads at this one all the time...
That tax deduction has been around a long time; unlike tato, I don't see it going away soon.
Nemo, the $40 tax change doesn't seem right unless one of the following is occurring:
1) You entered the amount in the wrong spot or at the wrong amount. The entire "deductible" portion (i.e. see Ski U Mah's post) should be listed as a charitable contribution.
2) Your tax bracket is very low or you needed this deduction to make itemized deductions more than the standard deduction. The 1/3 back assumes about a 30% tax bracket.
3) Your itemized deductions are so high you hit the limit and most of the $1,500 is disallowed.
You should be able to figure your marginal tax bracket from the tax tables. If your tax deductions are over the limit, your tax program should let you know this.
Nemo, the $40 tax change doesn't seem right unless one of the following is occurring:
1) You entered the amount in the wrong spot or at the wrong amount. The entire "deductible" portion (i.e. see Ski U Mah's post) should be listed as a charitable contribution.
2) Your tax bracket is very low or you needed this deduction to make itemized deductions more than the standard deduction. The 1/3 back assumes about a 30% tax bracket.
3) Your itemized deductions are so high you hit the limit and most of the $1,500 is disallowed.
You should be able to figure your marginal tax bracket from the tax tables. If your tax deductions are over the limit, your tax program should let you know this.
Charity
Tato is right in that the IRS will eventually amend the deduction for charitable contributions to exclude the amount donated which is applied for the right to get tickets. The purpose of a charitable contribution is not to get something in return. Because you are receiving a benefit from the donation in tickets, either through improved seats or simply the ability to buy them, you should not be able to deduct the amount.
But for now, was there any other area in TurboTax under contributions? You might need to work your way around it to get the full value of your deduction.
Tato is right in that the IRS will eventually amend the deduction for charitable contributions to exclude the amount donated which is applied for the right to get tickets. The purpose of a charitable contribution is not to get something in return. Because you are receiving a benefit from the donation in tickets, either through improved seats or simply the ability to buy them, you should not be able to deduct the amount.
But for now, was there any other area in TurboTax under contributions? You might need to work your way around it to get the full value of your deduction.
Not quite correct
The IRS studied this years ago and recognized that the charitable part of the total price (that part less the ticket price) did have a value toward the ticket location or what ever. They came to the conclusion that 20% of this amount did have value to the ticket holder, so only 80% of the "charitable" amount is tax deductible. This has been time proven and unless Congress is looking for new revenue sources I doubt that these percentages will change.
The IRS studied this years ago and recognized that the charitable part of the total price (that part less the ticket price) did have a value toward the ticket location or what ever. They came to the conclusion that 20% of this amount did have value to the ticket holder, so only 80% of the "charitable" amount is tax deductible. This has been time proven and unless Congress is looking for new revenue sources I doubt that these percentages will change.
Good for you, my salary isn't that high (I teach). I choose to give back to the University in hope that I will see a Rose Bowl in my lifetime. That's where I get a kick out of the patience and recruit faction, as a donor I hope to see major on field improvement this year. I like the Horton hire I'm glad Jedd went to Seattle.
We can come up with a LONG list of posters around here that certainly wouldn't have to look at a thread talking about a "charitable contribution" to the Football program at the U.
So true. So true.