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Nonprofit Law/501(c)(3) - Deduction of Unreimbursed Expenses

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Question
I had a quick question about our organization.  My partner and I just started a non-profit and we are recognized by the IRS as a 501(c)(3) public charity.  We are needing to set up meetings with some future board members and funders.  I will need to purchase a flight to get to these meetings with my partner and them, however, our organization has no money right now, so I would have to pay for it myself.  My question is, can I donate money to the organization and the organization buy my flight as a business related expense?  And can I claim that donation on my person tax return?

Thanks!

Jeffery

Answer
I am assuming that you are a volunteer and are not seeking deferred compensation from the organization for your services to the organization.  The proper procedure would be that you obtain from your Board a resolution as to the travel expenses being valid expenses of the organization.  Then you would pay for those travel expenses and deduct the amount you spent as an unreimbursed expense.

See IRS Publication 526 "Charitable Donations" which is available at http://www.irs.gov/pub/irs-pdf/p526.pdf starting in the first column of page 5 under the heading "Out-of-Pocket Expenses in Giving Services" we see that you could deduct the unreimbursed expenses that you paid for the use of the charitable organization when the expenses you had only because of the services you gave.  The details are found on page 19 of the record-keeping requirements in the middle column under the heading "Out-
of-Pocket Expenses" where you see you would need the organization's written acknowledgment to deduct.  Details of the acknowledgement are also found on pdf page 11 at:
http://www.irs.gov/pub/irs-pdf/p1771.pdf

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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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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