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Charitable contributions are covered in
The section you may be looking for is
(l) Treatment of certain amounts paid to or for the benefit of institutions of higher education (1) In general For purposes of this section, 80 percent of any amount described in paragraph (2) shall be treated as a charitable contribution. (2) Amount described For purposes of paragraph (1), an amount is described in this paragraph if- (A) the amount is paid by the taxpayer to or for the benefit of an educational organization- (i) which is described in subsection (b)(1)(A)(ii), and (ii) which is an institution of higher education (as defined in section 3304(f)), and (B) such amount would be allowable as a deduction under this section but for the fact that the taxpayer receives (directly or indirectly) as a result of paying such amount the right to purchase tickets for seating at an athletic event in an athletic stadium of such institution. If any portion of a payment is for the purchase of such tickets, such portion and the remaining portion (if any) of such payment shall be treated as separate amounts for purposes of this subsection.
If Tom is not allowed to purchase the tickets at a below market price, then the contribution to the university would be allowed.
Here is a link to the IRC through Cornell Law
It is near the bottom as you scroll.
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What would the amount be? I am taking the $2000 and subtracting the $400 and then taking 80% of that total. Am I right?
You need not subtract the cost of the tickets from the contribution as long as the $400 would be the cost any way. You would only need to worry about the cost of tickets if others that do not make a contribution would be required to pay more than $400.
80% of the $2000
0% of the $400
If the cost is discounted then you would need to subtract the discount from the $2000 then 80% of that for contribution.
If tickets are normally $600 then the $200 discount would come from the $2000 ($1800) and 80% of the result would be the contribution($1440)
I am assuming that the cost is $400, so in this case I would just take 80% of the $2000?
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