lisard5 Posted February 28, 2006 Share Posted February 28, 2006 Thank you all for your help. I'll check with the corps themselves. I think my other option could have been to give the money as a one time gift. I think there is a provision somewhere along those lines that allow you to give up to a certain amount of money to anybody you deem without the possibility of being taxed? Not sure on that but thanks again!! Oh well yeah . . you can make a gift up to 11,000 a year (22K if married) but its not deductible unless it is to a 501©3 organization. The fact that you want it to go for a certain individual doesn't matter and is perfectly fine as long as the actual check is written to the organization. Its that simple :) Hope that helps! Quote Link to comment Share on other sites More sharing options...
bstar82 Posted February 28, 2006 Author Share Posted February 28, 2006 Oh well yeah . . you can make a gift up to 11,000 a year (22K if married) but its not deductible unless it is to a 501©3 organization. The fact that you want it to go for a certain individual doesn't matter and is perfectly fine as long as the actual check is written to the organization. Its that simple :) Hope that helps! Okay lisa, so my safest route is to write the check to Gidget drum and bugle corps and what, write on the check, "Apply to tour fees and dues for Art Vandelay"? :) Quote Link to comment Share on other sites More sharing options...
Shadow_7 Posted February 28, 2006 Share Posted February 28, 2006 I'm not tax person, but the YEA member sponsorship form specifically states that the donation is NOT tax deductible. I'm sure there's ways around that, but the standard deduction is over $4K, so unless you're donation is in excess of that, you probably wont benefit much by claiming it on your taxes. Unless you don't file 1040EZ and otherwise have kids, student loan interest and other things that push you over the standard deduction. Check with your tax advisor. As a single male, no debt, father of none, I get the TAX shaft no mater how I write it up, or who I pay to do my taxes for me. Quote Link to comment Share on other sites More sharing options...
lisard5 Posted February 28, 2006 Share Posted February 28, 2006 Okay lisa, so my safest route is to write the check to Gidget drum and bugle corps and what, write on the check, "Apply to tour fees and dues for Art Vandelay"? :) Um . . not exaclty!!! lol The organization needs to be a 501C3 organization . . . they'll give you a letter saying that your donation is tax deductible. Quote Link to comment Share on other sites More sharing options...
Iplaytimpani Posted February 28, 2006 Share Posted February 28, 2006 Thanks Lisa! I'm hoping this new information can help me find a sponsor!! You will now be our resident tax person! Quote Link to comment Share on other sites More sharing options...
BlueStarsWebmaster Posted February 28, 2006 Share Posted February 28, 2006 Here's a side question: What if a parent pays ("sponsors") his/her child's dues to the corps? Would that be deductible too? Quote Link to comment Share on other sites More sharing options...
SkyRyder_FMM Posted February 28, 2006 Share Posted February 28, 2006 Charitable contributions are deductible only if you itemize your deductions. To be deductible, charitable contributions must be made to qualified organizations. Qualified organizations include, but are not limited to, Federal, state, and local governments and organizations organized and operated only for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals. Organizations can tell you if they are qualified and if donations to them are deductible. Such organizations are 501©3 organizations under the Internal Revenue Code. It's more complicated when corps are affiliated with VFW and AL posts. These posts are generally organized as 501© 4 organizations, and deductions are tax deductable only if 90% of the members are comprised of war veterans. Donations would have to be made to a qualifying post to be tax deductible, and it would be up to the post to use the funds for the corps. The use of hte funds cannot be dictated by the donor. If your contribution entitles you to merchandise, goods, or services, including admission to a performance, CD's, DVD's, programs, etc., you can deduct only the amount that exceeds the fair market value of the benefit received. Contributions you cannot deduct at all include contributions made to specific individuals, the value of your time or services and the cost of raffles, bingo, or other games of chance. You cannot deduct contributions that you give to qualified organizations if, as a result, you receive or expect to receive a financial or economic benefit equal to the contribution. Although you cannot deduct the value of your time or services, you can deduct the expenses you incur while donating your services to a qualified organization. If the expenses are for travel, which may include transportation and meals and lodging while away from home, they may be deducted only if there is no significant element of personal pleasure, recreation, or vacation in the travel. Actual costs of gas and oil can be deducted, or you can choose to take 14 cents per mile for using your own car (Hint: for all you volunteers out there, this may apply to you). Deductions for contributions in excess of 20% of your adjusted gross income may be limited depending on the type of property or the type of organization the donation is contributed to. You cannot donate to a corps and specify that the contribution is to pay for the dues of a member. The donation must be made solely to the not-for-profit organization to be tax deductible. If your parents pay your dues, they cannot deduct it as a charatible contribution. In response to the earlier post of how you can donate to the United Way and deignate the charity, this is VERY different. With the United Way example, you are donating to the United Way, and any selection of a specific charity is simply an election to donate to a 501©3 organization - not to an individual that will derive direct benefit from the contribution. This analogy is WAY off base, and is the kind that can get you into trouble. Tim Kviz, XXX (I can't put the acutal letters here, since I am not licensed in every state that this will be read in, but you get the drift) Quote Link to comment Share on other sites More sharing options...
MN DCI Fan Posted February 28, 2006 Share Posted February 28, 2006 Wow. Thanks for causing me not-so-welcome flashbacks to my Federal Income Taxation class in law school. :P Quote Link to comment Share on other sites More sharing options...
lisard5 Posted February 28, 2006 Share Posted February 28, 2006 Ok now I'm confused. I did the research and saw nothing limiting it if its for a certain member. . . as long as the donor is not actually benefiting (such as free tickets to show etc.) Just for my added knowledge what code section are you using? My tax background is mainly partnership/gift/trusts so I'd like to know more!! Thanks! Quote Link to comment Share on other sites More sharing options...
SkyRyder_FMM Posted February 28, 2006 Share Posted February 28, 2006 Ok now I'm confused. I did the research and saw nothing limiting it if its for a certain member. . . as long as the donor is not actually benefiting (such as free tickets to show etc.) Just for my added knowledge what code section are you using? My tax background is mainly partnership/gift/trusts so I'd like to know more!! Thanks! Lisa, It's Title 26, Subtitle B, Chapter 12, Subchapter C, Sec. 2522, and the interpretations thereof. That section basically says that the deductions are tax deductible if made to the organization. Title 26, Subtitle A, Chapter 1, Subchapter B, Part VI, Sec. 170 discusses a whole host of situations on when contributions are in fact deductible, and when there are limitations on deductibility. Disallowance of certain deductions is covered in Title 26, Subtitle A, Chapter 1, Subchapter F, Part II, Sec. 508. Designating the contribution to be for a specific individual is not a donation to the 501©3 organization, but rather a taxable gift to the individual that contains limits on their use of the gift (think establishment of a trust where the executor has specific instructions on how the assets of the trust are to be used). These gifts will likely qualify for the exclusions permitted under Title 26, Subtitle B, Chapter 12, Subchapter A, Sec. 2503, given the size of the contribution. Bascially, it's extremely complicated, and you should consider consulting your tax advisor. I hope that helps. Tim Quote Link to comment Share on other sites More sharing options...
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