Legal Question in Tax Law in Connecticut

50l(c)3 - Tax deductible question

I am a volunteer for a national dog rescue organization. We just achieved 50l(c)3 status. My question is about donations. We commonly sell items with our logo to raise funds. Is the money we receive for these items a tax deductible donation for the people purchasing the item. When would it be and when would it not be? Also, we rescue and rehome dogs. If someone adopts one of our dogs are the monies they pay a total tax deduction for them? How do we determine this. It is my understanding that if we say these things are a donation, then we can give them a receipt for the entire amount paid. Is this correct? Thanks so much.


Asked on 2/02/00, 11:43 am

1 Answer from Attorneys
Walter LeVine Walter D. LeVine, Esq.

Re: 50l(c)3 - Tax deductible question

Purchases of products are not donations, except to the extent that the purchase price exceeds the reasonable value of the merchandise purchased (e.g., if the product would sell for $5 and is sold for $10, only the extra $5 is deductible. Likewise, is the organization held a concert and charged $25 for admission, and the reasonable value of an admission is $10, only the excess $15 is deductible). Contributions to an ad journal are fully deductible.

The dog question is a little more difficult, since homeless dogs can be adopted from local pet agencies for free. In many instances, first shots are included. My belief is that the full "purchase price" would be a deductible donation, although it might be argued that the cost of shots is being reimbursed and this value would not be deductible.

Walter

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Answered on 2/03/00, 10:06 am


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