SOUTHWEST TAX & ACCOUNTING
503 Morton, Box 1367
Elkhart, KS 67950-1367
IRS doesn't necessarily consider it a gift, but a nondeductible contribution. There's a difference. For example, when a church takes up a "love offering" (or something similar), for a speaker or performer, the donations are nondeductible to the donors but taxable payment for services to the recipient.
The whole area of designated contributions is a minefield, full of contradictory rulings and case law. Hammar's Church and Clergy Tax Guide devotes about 15 pages to this issue alone. It's a great insomnia cure.
Chuck
From: taxchat@yahoogroups
.com [mailto:taxchat@yahoogroups.com ] On Behalf Of Mel Wolfson
Sent: Wednesday, September 17, 2008 10:25 PM
To: taxchat@yahoogroups.com
Subject: RE: [taxchat] Restricted donations
Please explain. How can a gift be income to the recipient?
From: taxchat@yahoogroups
.com [mailto:taxchat@yahoogroups.com ] On Behalf Of Chuck Warman
Sent: Wednesday, September 17, 2008 11:12 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Restricted donationsIt's a gift to the donor, but very possibly taxable income to the recipient.
This is not a good way to go.
Chuck
Terri Ryman writes:
> That is my understanding...if the donor specifies specific use, then it is a gift, not a donation.
>
> Terri L. Ryman, EA
> SOUTHWEST TAX & ACCOUNTING
> 503 Morton, Box 1367
> Elkhart, KS 67950-1367
>
> 620.697.2422 Phone
>
> 620.697.4757 Fax
>
> tryman@elkhart.com
>
>
> ----- Original Message -----
> From: Donna L Loeffler CPA
> To: taxchat@yahoogroups.com
> Sent: Wednesday, September 17, 2008 8:25 AM
> Subject: [taxchat] Restricted donations
>
>
> If someone donates to a 501(c)(3) charitable organization and specifies
> that the donation is to be used for an individual, would that be a tax
> deductible charitable contribution for the donor? A taxpayer donated $
> to a choir to be used to offset expenses for one of the girls in the
> choir and specified that it be used for that one girl. The choir wrote
> a receipt that said it was not tax-deductible.
>
> --
> Donna
> Donna L. Loeffler, CPA
> 936 Church Avenue
> St. Charles, MN 55972
> (507) 251-8119
> dllcpa@hbci.com
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> IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
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IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.
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