What are the rules on holding a benefit for a non-profit organization and the money coming in being tax-exempt or tax-deductible as a charitable donation? Can you get temporary 501c3 or can you use the 501c3 status of the non-profit your event is to benefit?

hmm...i think i can help you out






in about 3 years LMAO

Pick6;377384 wrote:hmm...i think i can help you out




in about 3 years LMAO

Dynamite drop-in.

i sent an email to my accountant buddy asking him.

Go here to start: http://www.irs.gov/publications/p557/ch03.html#d0e3260.

Contributions to 501(c)(3) Organizations

Contributions to domestic organizations described in this chapter, except organizations testing for public safety, are deductible as charitable contributions on the donor's federal income tax return.
Fund-raising events. If the donor receives something of value in return for the contribution, a common occurrence with fund-raising efforts, part or all of the contribution may not be deductible. This may apply to fund-raising activities such as charity balls, bazaars, banquets, auctions, concerts, athletic events, and solicitations for membership or contributions when merchandise or benefits are given in return for payment of a specified minimum contribution. If the donor receives or expects to receive goods or services in return for a contribution to your organization, the donor cannot deduct any part of the contribution unless the donor intends to, and does, make a payment greater than the fair market value of the goods or services. If a deduction is allowed, the donor can deduct only the part of the contribution, if any, that is more than the fair market value of the goods or services received. You should determine in advance the fair market value of any goods or services to be given to contributors and tell them, when you publicize the fund-raising event or solicit their contributions, how much is deductible and how much is for the goods or services. See Disclosure of Quid Pro Quo Contributions in chapter 2.

I'm not aware of any clause allowing temporary 501c3 status to hold a benefit for an existing 501c3 entity. I'm also not sure whether a separate entity can utilize the tax exempt status for a benefit. There are instances where a "taxable" entity can purchase items tax-free for incorporation to a product or service provided to the 501c3 though.

justincredible;377352 wrote:What are the rules on holding a benefit for a non-profit organization and the money coming in being tax-exempt or tax-deductible as a charitable donation? Can you get temporary 501c3 or can you use the 501c3 status of the non-profit your event is to benefit?

I THINK you earmark everything, then write it all off as a donation. That's how we have done it in the past. Hope that's right actually, lol.

I'll check with my wife on this as she works on these all of the time with Junior League stuff, without knowing the facts my gut tells me the holder is responsible for informing participants what portion of their contribution is tax deductible and what isn't (e.g. a charity dinner at $100/plate would be tax deductibe to the participant for the spread in value of the dinner and $100), and to the extent the net funds go to the 501(c)(3) all funds are tax exempt. It also seems to me that the holder can offset costs of the fundraiser to the amounts forwarded to the 501(c)(3). At any rate it would seem odd to be forced to form a separate 501(c)(3) as a sponsor.

You can use the status of the orginization you are benefiting. I always give something to the donor showing what is tax deductable. At work we do a golf outing each year for a charity. I give them a receipt that says you paid $xx and $yy went to pay for Golf, food, etc. and $zz was going to the actual organization. Some people think that if you pay $100 to golf in a charity outing the whole thing is deductable, but you have to back-out expenses paid by the organization.

Rider_In_Ttown;377550 wrote:You can use the status of the orginization you are benefiting. I always give something to the donor showing what is tax deductable. At work we do a golf outing each year for a charity. I give them a receipt that says you paid $xx and $yy went to pay for Golf, food, etc. and $zz was going to the actual organization. Some people think that if you pay $100 to golf in a charity outing the whole thing is deductable, but you have to back-out expenses paid by the organization.

Good info, this definitely helps. Thanks!