However, to the extent that a purchaser pays more than the fair market value of an item a deduction may be taken for the amount paid that exceed the fair market value. Anytime a donor receives something of value in return for the money paid it is not considered a tax-deductible contribution. Is the amount paid for items purchased from a school auction tax-deductible for the buyer? The IRS has strict rules regarding nonprofits setting up individual fundraising accounts (IFAs) as these types of activities are called. Can a nonprofit group set up separate “accounts” for individual students? For example, individual students are credited with the dollars they earn during a candy or other sale towards a band trip so that if student A nets $100 from the sale her trip costs are reduced by that $100?
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