IRS Material: Donations-Non Cash
Pub 17
If you give property to a qualified organization, you generally can deduct the fair market value of the property at the time of the contribution. See Contributions of Property, later in this chapter. Your deduction for charitable contributions is generally limited to 50% of your adjusted gross income, but in some cases 20% and 30% limits may apply. Contributions From Which You Benefit (Payments partly for goods or services) 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. 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. Charity benefit events. If you pay a qualified organization more than fair market value for the right to attend a charity ball, banquet, show, sporting event, or other benefit event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive. If there is an established charge for the event, that charge is the value of your benefit. If there is no established charge, your contribution is that part of your payment that is more than the reasonable value of the right to attend the event. Whether you use the tickets or other privileges has no effect on the amount you can deduct. However, if you return the ticket to the qualified organization for resale, you can deduct the entire amount you paid for the ticket. Even if the ticket or other evidence of payment indicates that the payment is a "contribution," this does not necessarily mean you can deduct the entire amount. If the ticket shows the price of admission and the amount of the contribution, you can deduct the contribution amount. Example. You pay $40 to see a special showing of a movie for the benefit of a qualified organization. Printed on the ticket is "Contribution--$40." If the regular price for the movie is $8, your contribution is $32 ($40 payment - $8 regular price). Membership fees or dues. You may be able to deduct membership fees or dues you pay to a qualified organization. However, you can deduct only the amount that is more than the value of the benefits you receive. You cannot deduct dues, fees, or assessments paid to country clubs and other social organizations. They are not qualified organizations. Certain membership benefits can be disregarded. Both you and the organization can disregard certain membership benefits when they are provided in return for an annual payment of $75 or less to the qualified organization. You can pay more than $75 to the organization, if the organization does not require a larger payment for you to receive the benefits. The benefits covered under this rule are: 1.Any rights or privileges, other than those discussed under Athletic events earlier, that you can use frequently while you are a member, such as: a.Free or discounted admission to the organization's facilities or events, b.Free or discounted parking, c.Preferred access to goods or services, and d.Discounts on the purchase of goods and services; 2.Admission, while you are a member, to events that are open only to members of the organization, if the organization reasonably projects that the cost per person (excluding any allocated overhead) is not more than $6.90 (for 1997 events). This amount may be adjusted annually for inflation. Token items. You can deduct your entire payment to a qualified organization as a charitable contribution, if both of the following are true: 1.You receive: a.As a result of the payment, low-cost items such as bookmarks, calendars, mugs, or caps that have on them the organization's name or logo, or b.A low-cost item that you did not order and can keep even if you do not make a contribution. 2.The qualified organization correctly informs you that the value of the item you received is not substantial and that you can deduct your payment in full. Written statement. A qualified organization must give you a written statement if you make a payment to it that is more than $75 and is partly a contribution and partly for goods or services. The statement must tell you that you can deduct only the amount of your payment that is more than the value of the goods or services you received. It must also give you a good faith estimate of the value of those goods or services. The organization can give you the statement either when it solicits or when it receives the payment from you. An organization will not have to give you this statement if one of the following is true: 1.The organization is: a.The type of organization described in (5) under Types of Qualified Organizations, earlier, or b.Formed only for religious purposes, and the only benefit you receive is an intangible religious benefit (such as admission to a religious ceremony) that generally is not sold in commercial transactions outside the donative context. 2.You receive only low-cost items as described under Token items, earlier. Expenses Paid for Student Living With You You may be able to deduct some expenses of having a student live with you. You can deduct qualifying expenses for a foreign or American student who: 1.Lives in your home under a written agreement between you and a qualified organization as part of a program of the organization to provide educational opportunities for the student, 2.Is not your dependent or relative, and 3.Is a full-time student in the twelfth or any lower grade at a school in the United States. You can deduct up to $50 a month for each full calendar month the student lives with you. Any month when conditions (1) through (3) above are met for 15 days or more counts as a full month. Mutual exchange program. You cannot deduct the costs of a foreign student living in your home under a mutual exchange program through which your child will live with a family in a foreign country. Out-of-Pocket Expenses in Giving Services You may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be: Unreimbursed, Directly connected with the services, Expenses you had only because of the services you gave, and Not personal, living, or family expenses. Conventions. If you are a chosen representative attending a convention of a qualified organization, you can deduct actual unreimbursed expenses for travel and transportation, including a reasonable amount for meals and lodging, while away from home overnight in connection with the convention. However, see Travel, later. You cannot deduct personal expenses for sightseeing, fishing parties, theater tickets, or nightclubs. You also cannot deduct travel, meals and lodging, and other expenses for your spouse or children. You cannot deduct your expenses in attending a church convention if you go only as a member of your church rather than as a chosen representative. You can deduct unreimbursed expenses that are directly connected with giving services for your church during the convention, but you cannot claim the cost of your evening at the theater. Uniforms. You can deduct the cost and upkeep of uniforms that are not suitable for everyday use and that you must wear while performing donated services for a charitable organization. Foster parents. You can deduct some of the costs of being a foster parent (foster care provider) if you have no profit motive in providing the foster care and are not, in fact, making a profit. You can deduct expenses that are: 1.Greater than any nontaxable payments you receive to provide foster care for individuals placed in your home by a charitable organization, and 2.Spent to provide support for those individuals. Car expenses. You can deduct unreimbursed out-of-pocket expenses, such as the cost of gas and oil, that are directly related to the use of your car in giving services to a charitable organization. You cannot deduct any part of general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you do not want to deduct your actual expenses, you can use a standard rate of 12 cents a mile to figure your contribution. Beginning in 1998, the standard mileage rate increases to 14 cents per mile. You can deduct parking fees and tolls, whether you use your actual expenses or the standard rate. You must keep reliable written records of your car expenses. For more information, see Car Expenses under Records To Keep, later. Travel. Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in such travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses. The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your own travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties relating to the performance of services for the charity, or for significant portions of the trip you are not required to render services, you cannot deduct your travel expenses.