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Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
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letsgobobby
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Userdc
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Re: Fair market value of a non profit dinner

Post by Userdc »

For such a low dollar amount, I'd have trouble convincing myself I paid more than FMV for the goods and services. its a rounding error, so I'd take the easy way out and deduct zero.

I do deduct a portion of the cost in similar situations when the non-profit tells me how much is deductible, but those also tend to be very large and established non-profits. Of course that doesn't mean I should take tax advice from them, but for some reason it makes me more comfortable.
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cheese_breath
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Re: Fair market value of a non profit dinner

Post by cheese_breath »

What do you estimate a comparable dinner would cost you in a nice restaurant? (I'm assuming the winery is equivalent to a nice restaurant.) Be sure to include the tip. I'm guessing your answer won't be much less than $50.00 per person. This is probably just for your own satisfaction in determining you got your money's worth, because I doubt the IRS would allow the deduction without proof from the non-profit anyway.
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letsgobobby
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Re: Fair market value of a non profit dinner

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N1CKV
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Re: Fair market value of a non profit dinner

Post by N1CKV »

I think the best answer to them would be that the FMV was $51, although the non-profit expended much less due to donated venue, volunteer labor, etc. Therefore they have a negative $1 in their charitable giving column :wink:
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letsgobobby
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Re: Fair market value of a non profit dinner

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Andyrunner
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Re: Fair market value of a non profit dinner

Post by Andyrunner »

more importantly...how was and what type of wine? :happy
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TheTimeLord
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Re: Fair market value of a non profit dinner

Post by TheTimeLord »

letsgobobby wrote:A non-profit (my wife is on the board) hosted a fundraising dinner and charged each person $50 attendance. The gala was at a local winery, hosted for free since the winery's owner is active in the non-profit.

The cost of the food and rentals was $12. The labor was provided by volunteers who are active in the non-profit.

The wine was $8 per person ($4 per glass, 2 glasses per person, winery provided the wine at cost rather than charging market/retail).

The question is: what was the fair market value of the dinner? Are attendees permitted to deduct any portion of the $50?
No. If you want a deduction just make a straight donation.
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letsgobobby
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Re: Fair market value of a non profit dinner

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freebeer
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Re: Fair market value of a non profit dinner

Post by freebeer »

I've been to a number of nonprofit dinners where I'm convinced the fair market value would have been like -$20, i.e. you'd have to pay me twenty bucks (at least) to eat that rubber chicken and spend my time listening to boring speeches, were it not for the philanthropic value of the host organization. Pretty sure the IRS wouldn't buy a $70 deduction for a $50 dinner though... :(
Boglegrappler
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Re: Fair market value of a non profit dinner

Post by Boglegrappler »

I'm sure this isn't in the IRS code, but one logical way to look at it would be that the amount banked by the non-profit, plus anything spend on something other than the dinner ought to be deductible. I suspect that it works out differently than that, and that if the IRS can successfully argue that the value of the dinner was $50 per person, then no one can deduct anything. If the provider of the dinner deducts the true value of his donation (not sure that's allowed) then clearly attendees wouldn't be able to deduct much, if anything.
Calm Man
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Re: Fair market value of a non profit dinner

Post by Calm Man »

I go to many of these although they are usually $200 or more for almost anything. The receipt from the charity always says how much is deductible. My reaction to the original post was how dare the wine place charge anything for a charitable event? Or if anything it cold have been less than their "cost" which believe me he inflated.
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Zabar
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Re: Fair market value of a non profit dinner

Post by Zabar »

letsgobobby wrote:The question is: what was the fair market value of the dinner? Are attendees permitted to deduct any portion of the $50?
The nonprofit should provide that information on your receipt for the event. Given the price, any tax deduction is going to be trivial at best.
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