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Nonprofit Law/Non-profit Member Dues

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Question
I run a 501(c)(3) youth baseball club. I understand that member fees are NOT deductible unless the VALUE of the training received is higher than the monthly fees. And then only the difference MAY be deductible. How in the world do I determine fair market value of our training by the coaches?

Answer
If the fees are not at all a donation, then none of it is deductible as a charitable donation.  You can advise the members to see IRS Publication 526 "Charitable
Donations"  which is available at:
http://www.irs.gov/pub/irs-pdf/p526.pdf

on page 6 middle column under the heading "Contributions
You  Cannot Deduct" is "3. The part of a contribution from which
you receive or expect to receive a benefit"

on page 4, first column,  "You may be able to deduct membership
fees or dues you pay to a qualified organization. However, you can
deduct only the amount that is more than the value of the benefits
you receive. You cannot deduct dues, fees, or assessments paid to
country clubs and other social organizations. They are
not qualified organizations."

As for your duty, see  http://www.irs.gov/pub/irs-pdf/p1771.pdf
which is IRS Publication "Charitable Contributions --
Substantiation and Disclosure Requirements" and specifically on pdf page 7:
--- Start of Excerpt ---
   
Goods and Services
The acknowledgment must describe goods or services an
organization provides in exchange for a contribution of
$250 or more. It must also provide a good faith estimate of
the value of such goods or services because a donor must
generally reduce the amount of the contribution deduction
by the fair market value of the goods and services provided
by the organization.
---End of Excerpt---
If you can not, in good faith show that the organization is obtaining surpluses above its operational expenses from the membership fees, then I don't see how there is any donation amount and, then none of the payments are deductible as charitable contributions for federal income tax purposes.

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 possible 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. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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