AboutHarvey Mechanic Expertise US Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation.
To search my previous answers you can do a Google search: site:allexperts.com/q/nonprofit [with your other search terms appended].
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
Education/Credentials B.S. Columbia University in New York City, 1970
J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude
Question We recently hosted a fundraising event that included purchasing a ticket, a live and silent auction and an on-site contribution.
My questions is in regards to the acknowledgement. The cost for the ticket was $125. The tax-deductible amount is $75. What is the appropriate language to use in order to describe this to the donor?
Also, for those donors who may have bought a ticket, auction item and made a contribution, I would like to only send one letter. Can I create an itemized statement to include with the letter for them? And again, what is the correct language in the case where the auction item is valued higher then the price they paid?
Thank you.
Answer See the IRS Publication "Charitable Donations --- Substantiation
and Disclosure Requirements"
www.irs.gov/pub/irs-pdf/p1771.pdf
Example on pdf page 11, "Thank you for your cash contribution of
$350 that (organization's name) received on May 6, 2005. In
exchange for your contribution, we gave you a cook-
book with an estimated fair market value of $60."
Yes, you can put everything in one letter. As to the auction, see IRS Publication 526 "Charitable Donations"
www.irs.gov/pub/irs-pdf/p526.pdf
on page 3 "Example 2. At a fund-raising auction con-
ducted by a charity, you pay $600 for a week’s
stay at a beach house. The amount you pay is
no more than the fair rental value. You have not
made a deductible charitable contribution."
That evidences that the value of the item is relevant no matter whether it is sold or purchased by auction.
Harvey Mechanic
Attorney at Law
Harvey108@hotmail.com
