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

By eHow Personal Finance Editor

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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.

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Instructions

Difficulty: Moderately Easy

Things You’ll Need:

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

Step1

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

Step2

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

Step3

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.