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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 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 you
get in return for an
annual payment of $75 or
less to the qualified
organization. The
benefits that can be
disregarded 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 $8.90.
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 get a small item
or other benefit of
token value.
2. The qualified
organization correctly
determines that the
value of the item or
benefit you received is
not substantial and
informs you that you can
deduct your payment in
full.
The organization
determines whether the
value of an item or
benefit is substantial
by using Revenue
Procedures 90-12 and
92-49 and the inflation
adjustment in Revenue
Procedure 2006-53 .
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