A charitable donation is deductible to the extent the donation exceeds the value of any goods or services received in exchange. So what happens when you donate to your favorite charity and receive something tangible in return? This is the issue of “quid pro quo” in charitable gift law.
Quid pro quo (“something for something” in Latin) means an exchange of goods or services, where one transfer is contingent upon the other.
You may deduct the cost of your donation less the value of the goods/services received. If you’re not sure of the value of an item or service received after a donation, be sure to ask. Charitable organizations should provide you clear documentation of the value of your donation.
A quick and easy example, which may be timely too.* If a donor gives a charity $100 and receives a Wagner opera ticket valued at $40, the donor has made a quid pro quo contribution. In this example, the charitable contribution part of the payment is $60. The donor is entitled to a charitable deduction not for $100, but for $60.
*Today is May 22, birthday of famous composer Wilhelm Richard Wagner, b. 1813
Gordon Fischer Law Firm, P.C. is dedicated to promoting and maximizing charitable giving in Iowa. Gordon can be reached by phone at 515-371-6077; by email at gordon@gordonfischerlawfirm.com; and through his website at www.gordonfischerlawfirm.com.
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