How to Take Tax Deductions for Charitable Contributions Where Property or Services Are Received in Return

No, you cannot go to a charity ball for $500 a couple, spend $1,000 more on an auction for a weekend rental and write the whole $1,500 off on your taxes. The way the Internal Revenue Service views it, you received a benefit and can deduct only the amount of your contribution that is more than the value of the benefit you received.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• IRS Forms
• Cancelled Checks
• Ledger Books
• Calculators
• File Cabinets
• File Folders
• Tax Preparation Software
• Calculators
• Ledger books

1. Estimate the fair market value of the goods or services you received, if this value has not already been established.

2. Subtract this amount from the amount you paid for the goods or services.

3. Enter the result as your charitable contribution on your itemized tax return.

Tips & Warnings

• Tickets to many charity functions list the amount that can be deducted on the ticket or invitation.
• For the excess amount of your charitable contribution to qualify for deduction, it must be motivated by a desire to make a contribution to the organization in excess of the value of the property or services you received.
• The IRS has numerous provisions for special cases, including those where the benefit received is only a token item such as a button or pin. Check IRS Publication 526 for details.