Legal Question in Tax Law in Minnesota

Charitable Speaking Deduction

I am a professional speaker. I would like to know if I can donate my services to nonprofit religious organizations in lieu of financial compensation and be able to deduct the cost of services provided on my taxes? I know the IRS does not allow deduction for the “Value of Time and Services”.

I have read that if you have the charitable organization sign an agreement to the value of your service and that you are waving the right to financial compensation, before your services are provided, you can deduct the fee as a charitable gift and not be liable for “constructive receipt” income. The following link is to a file where I learned about the deduction (see page 3 of the document):

Asked on 12/14/04, 10:40 pm

1 Answer from Attorneys

Burton Haynes Burton J. Haynes, P.C.

Re: Charitable Speaking Deduction

I'm afraid you are misreading the materials you cited. What the publication tells you is that if you make arrangements in advance, you can avoid taking the fee into income. What you suggest, and what you cannot do, is BOTH avoid taking the fee into income AND claim a deduction, so that you come out ahead of the game.

Say your fee is $1,000. You take the money ($1,000 of income), and you donate it ($1,000) of deduction -- you come out even. OR, you make arrangements in advance for what would otherwise have been your fee to instead go to charity -- income $0, deduction $0, and you still come out even. You cannot direct the fee to be paid to charity, omit it from your income, and then claim a deduction. That would give you a net $1,000 deduction, and since the theory is that it was not your money in the first place because of the prearrangement, you can't deduct giving away that which was not yours.

Close, but no cigar.

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Answered on 12/15/04, 10:14 am

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