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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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In regards XXXXX XXXXX deductions - Taxpayer runs marathons

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In regards XXXXX XXXXX deductions - Taxpayer runs marathons to raise money for qualified charitable organizations throughout the state and interstate. Few questions:

Are the Registration fees to sign up for the Marathon also a charitable deduction?
Mileage, yes. Use Actual Lodging rate if applicable? Or is it a maximum amount allowed for lodging? Are meals deductible @ 50% if over 50 miles from home on these marathon ventures? Or is there also a limitation other than reasonable?

Lev :

Hi and welcome to our site!
If the taxpayer has the status of a qualified charitable organization - marathon registration fees paid directly to that organization may be classified as charitable contributions.

Lev :

If donors receive a benefit as a result of making a contribution to a qualified organization, they can deduct only the amount of contribution that is more than the value of the benefit received. If you pay a qualified organization more than fair market value for the right to attend a sporting event, you can deduct only the amount that is more than the value of the privileges or other benefits you receive.


Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be:


--Unreimbursed,


--Directly connected with the services,


--Expenses you had only because of the services you gave, and


--Not personal, living, or family expenses.

Lev :

You can deduct as a charitable contribution any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution.
Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. There is no Per Diem rate - only actual expenses for meal and lodging may be deducted as charitable contributions. Only reasonable expenses may be deducted.

Lev :

Because these travel expenses are not business-related, they are not subject to the same limits as business related expenses. There is no 50% deduction limit.

Customer:

Understand all information, but need further explanation on the first & 2nd paragraph. Does a "volunteer participant runner" achieve the status of a qualified charitable organization? Eg: Runs in the Susan Komen Cancer Foundation Marathon, etc. Does this "volunteer participant runner" receive a benefit per the IRS if he receives a T shirt to wear in the marathon? Are there any other benefits he is considered to receive?

Lev :

Does this "volunteer participant runner" receive a benefit per the IRS if he receives a T shirt to wear in the marathon?
Yes - the value of a T shirt is considered as receiving a benefit - and that value will reduce his/her deductible charitable contribution.
Are there any other benefits he is considered to receive?
According to the IRS - the donor can deduct only the amount that is more than the value of the privileges or other benefits the person receives. Thus - we need to determine the value of the privilege to participate in the marathon which includes the cost of a T shirt, the cost of food provided, etc. That is according to IRS rules.

Lev :

As an illustration example...
Assuming registration fees to sign up for the Marathon are $100.
The organization cost of the Marathon - for instance - is $30 per each participant - we may use the cost to estimate the value of benefits received by the participant - that would be the value of the privilege to participate in the marathon.
So the remaining $70 will go to the Susan Komen Cancer Foundation for charitable purposes. Therefore - the deductible charitable contribution would be $70.

Just in case you were not able to use the chat - I am switching to Q&A mode and posting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

Does this "volunteer participant runner" receive a benefit per the IRS if he receives a T shirt to wear in the marathon?
Yes - the value of a T shirt is considered as receiving a benefit - and that value will reduce his/her deductible charitable contribution.
Are there any other benefits he is considered to receive?
According to the IRS - the donor can deduct only the amount that is more than the value of the privileges or other benefits the person receives. Thus - we need to determine the value of the privilege to participate in the marathon which includes the cost of a T shirt, the cost of food provided, etc. That is according to IRS rules.
.
As an illustration example...
Assuming registration fees to sign up for the Marathon are $100.
The organization cost of the Marathon - for instance - is $30 per each participant - we may use the cost to estimate the value of benefits received by the participant - that would be the value of the privilege to participate in the marathon.
So the remaining $70 will go to the Susan Komen Cancer Foundation for charitable purposes. Therefore - the deductible charitable contribution would be $70.
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