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Tee up deductions at a charitable event

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. I donated $500 for a golf event that was split between a charity and a needy person. Can I deduct the entire $500? S.O., Chester, N.J.

A. No. Your deduction is actually subject to two reductions. First, only the portion representing the donation in excess of the benefit received is deductible. This rule ap­­plies to contributions of $75 or more. For example, if the value of the golf outing is $100, then $400 is available for a deduction. Second, donations are deductible only if made to a qualified charitable organization; charitable gifts to specific individuals can’t be deducted. Assuming the donation is split evenly, in our example you could deduct $200 (50% of $400).

Tip: The charity can provide the exact amount of the deduction. Obtain written acknowledgments of all contributions.

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