Is a ticket to Fundraising Benefit Gala Tax Deductible? If so, how much, or is there a calculation?

Asked 11 months ago - Moorestown, NJ

I am planning a fundraising gala for a non-profit organization and I would like to know if a person or company purchases a ticket for $250, is that ticket tax deductible as a it is going to a verified 501(3)(c) non-profit organization. I have seen various things about the situation, but since I joined this site, hoping that the answer can be from a Tax Attorney. I would like to include the law or irs quote statute in our promotion materials if it is. I think I saw something about the fair market value, but the mark-up is only $75 per ticket, so would the tax credit be $175? Again, I don't know so hopefully someone can advise on this matter. Thank you in advance.

Attorney answers (4)

  1. E. Martin Davidoff

    Pro

    Contributor Level 15

    4

    Lawyers agree

    Answered . The purchasers of the tickets can secure a charitable deduction for the excess of the ticket price over the direct costs of the gala for each person. There is standard language you must provide in your acknowledgment and the CPA for the 501(c)(3) organization can assist you with that language.

    Marty Davidoff, emd@taxattorneycpa.com, 732-274-1600. This answer is provided for general information only. You... more
  2. Michael T Warshaw

    Contributor Level 17

    4

    Lawyers agree

    Answered . Whatever value you receive in exchange for your ticket is not deductible. The excess is considered a charitable donation. What is the value of the dinner that the ticket buyer is receiving? In your situation, it appears that the dinner/gala/function has a value of $175 and the extra charge is $75. This would make for a charitable deduction of $75.00. Consult with a tax lawyer or CPA to get specific advice on your situation.

    The content of the this submission is intended to provide general information on the topic presented, and is... more
  3. Jeffrey Jay Brookner

    Contributor Level 7

    1

    Lawyer agrees

    Answered . I agree with Mr. Davidoff and Mr. Warshaw, and would add one more point. While it is true that the charitable deduction would be limited to $75, the $175 component of the price may be deductible on another basis. For example, it may be possible to deduct the entire price as a marketing expense if attendance benefits the taxpayer's business. Each individual attendee should consult with his/her tax professional to assess this issue.

    This answer is given for educational purposes only. Unless and until I agree in writing to become your lawyer,... more
  4. Kevin Matthew Sayed

    Contributor Level 13

    1

    Lawyer agrees

    Answered . Typically you can deduct 501c3 donations; if you fall into alternative minimum tax (complex analysis) sometimes deductions are limited.

    This answer is based on general legal principles only and is not intended to provide specific legal advice. This... more

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