Friday, July 20, 2012

Charitable Auctions and Tax Breaks

Earlier this week I put a post on my Facebook page about a gift certificate I had donated to a non-profits on-line silent auction.  Mistakenly I said "get a will and earn a write-off".  Another lawyer caught my mistake!  According to the IRS, only if the winner paid more than the fair market value of the donation, was a deduction allowed.  And then the deduction would only be for the amount exceeding the fair market value. For example, my gift certificate was for $350.  Only if the winner pays more than $350 is a deduction allowed, and then only the amount greater than $350.  So if they paid $400, the winner would have a charitable gift deduction of $50.

Lawyers, we are the subject of many jokes, but our keen eyes and attention to details are a great asset.  Thanks to Attorney E.W. for catching my oversight.  The Facebook post was quickly modified.  And here is a link to that on-line auction.

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