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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29535
Experience:  Taxes, Immigration, Labor Relations
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Is it a tax write off if I sponsor an athlete?

Customer Question

If I sponsor an athlete (i.e. a track athlete training for the Olympics) is it a tax write off?

Submitted: 9 years ago.
Category: Tax
Expert:  Lev replied 9 years ago.

Unfortunately - no.

Only gift to the eligible charitable organization may be deducted on your tax return.

The IRS provides that a gift to a specific person or the gift that benefits a specific person is not deductible.

For a recipient of the gift - does not need to claim it as income. Please see for reference IRS publication 525 page 30 - http://www.irs.gov/pub/irs-pdf/p525.pdf

The donor would be required to file a gift tax returns if the gift amount is above $12,000 per person per year (for 2007). There will not be any gift tax unless lifetime limit of $1,000,000 is reached.

Lev and other Tax Specialists are ready to help you
Customer: replied 9 years ago.

So, a business sponsoring an athlete can be written off as a business expense. Is that incorrect?

Expert:  Lev replied 9 years ago.

If you provide a specific source - I would examine it.

See for reference IRS publication 526 page 6 - http://www.irs.gov/pub/irs-pdf/p526.pdf

You cannot deduct contributions to specific individuals.

Customer: replied 9 years ago.

I don't think I was specific enough with my question...
If I have a business, and the business sponsors an athlete, can that be written off as a business expense (tax write off)?

Expert:  Lev replied 9 years ago.

If "the business sponsors an athlete" means - a gift to an athlete. The answer is no - that is not a business expense. You may find in the IRS publication 535 information which business expenses are deductible. - http://www.irs.gov/pub/irs-pdf/p535.pdf

If that means that the business paid to the athlete for services - for instance advertisement - that would be legit business expenses.

Customer: replied 9 years ago.

I'm sorry, I didn't scroll down so I didn't see the answer below my original question
here is the source... is it garbage?
http://tothenextlevel.org/docs/features/finding_a_sponsor/default.asp

Companies are often a better market for finding a sponsor, rather than individuals. Companies have the opportunity to take a deduction on the sponsorship as a business expense, whereas it is often difficult for individuals to get a tax write-off. Thus, your efforts towards finding a sponsor should focus on companies, rather than individuals.

Expert:  Lev replied 9 years ago.

The article you referenced above may not be used as a ground for deductions and might be misleading

Corporations allowed to deduct charitable contributions on form 1020 line 19 - http://www.irs.gov/pub/irs-pdf/f1120.pdf , however sponsoring an athlete or a sport team may is not deductible as charitable contribution.

Please also see instructions pages 10-11 for details about rules of deducting charitable contributions. - http://www.irs.gov/pub/irs-pdf/i1120.pdf More details are in the IRS publication 526 mentioned above. - http://www.irs.gov/pub/irs-pdf/p526.pdf - please see page 2

Not Deductible As Charitable Contributions - Money or property you give to:

  • Civic leagues, social and sports clubs, labor unions, and chambers of commerce
  • Iindividuals

Charitable contributions may not be deducted as business expenses. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business, trade, or profession. A necessary expense is one that is helpful and appropriate for your business, trade, or profession. It is unlikely that sponsoring an athlete or a sport team met definition of business expenses. - see IRS publication 583 page 9 - http://www.irs.gov/pub/irs-pdf/p583.pdf

Unless the sport is a field of business - the only way I may suggest for deduction is advertisement.

Sorry if the answer disappointed you.

Please also be aware that the domain you referenced is registered in Canada - http://www.networksolutions.com/whois/results.jsp?domain=tothenextlevel.org

Customer: replied 9 years ago.

Oh absolutely not a disappointment.
Actually glad that I could get a straight answer from someone for once.
Thank you so much for taking the time and being so thorough.
You were a great help! :)

Expert:  Lev replied 9 years ago.

Appreciate it. I wish you the best.