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Feast on quid pro quo contributions

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in Small Business Tax,Small Business Tax Deduction Strategies

When you make a donation to charity, you often receive a benefit in return.

Strategy: Obtain proof of your contribution and the value of the benefit. Generally, you can deduct the difference for such “quid pro quo contributions.”

For instance, if you attend a $100 per plate fundraising dinner and the meal is valued at $40, you can write off $60.

On the other hand, if you receive just a “low-cost item” like a pen or key chain, you may deduct the full amount of your donation.

  • The item can’t cost the charity more than $10.60, and the contribution must be at least $53. Plus, it must bear the organization’s name or logo.
  • The item’s fair market can’t exceed the lesser of $106 or 2% of your donation amount.

Tip: Coordinate quid pro quo contributions with other charitable gifts.

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