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What can I deduct for throwing church parties?

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What can I deduct for throwing church parties?

In our annual church fund raising auction I sell tickets to three parties that I hold on my property. I supply all of the food, and entertainment. This year I raised over $3,000. What charitable contribution deduction can I claim on my federal income taxes?

By throwing a party for the benefit of the church, which I assume is a 501(c)(3) nonprofit charity whether or not it has actually obtained a recognition letter from the Internal Revenue Service, you are providing a service to the church and therefore you cannot claim the fair market value of the events as a charitable contribution deduction, but only your out-of-pocket costs in producing the events. These costs would include the cost of the food and what you pay for entertainment (assuming you hire others and don’t get volunteers to provide it or provide it yourself). The value of your services in putting it all together is not deductible. If you are going to claim deductions of $250 or more, you must have a written acknowledgment from the church confirming the amount you contributed and that you did not get any goods or services in return (or the value of any goods or services you did receive if applicable). If you don’t have such a letter, the IRS can deny your deduction. (See Ready Reference Page: “IRS Requires Substantiation of Contributions”)
The purchasers can deduct only the amount they pay in excess of the fair market value of the event. You have to make a good faith estimate of the value of the event even though the church isn’t paying anything for it. (See Ready Reference Page: “Charities Must Set Value on Quid Pro Quo Gifts”)
Saturday, March 3, 2012

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