Make donation through proxy (friend) and deduct?

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neatp
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Make donation through proxy (friend) and deduct?

Post by neatp » Tue Nov 12, 2019 12:24 pm

Hi!

This year, I'm planning to make a donation through another person by sending them a check with "Donate this to X charity" in the memo and then having them send that money to a charity. I'll also ask them to give me the receipt for my records. Can I deduct this donation on my taxes? (my friend will not, since it is my money)

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CAsage
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Re: Make donation through proxy (friend) and deduct?

Post by CAsage » Tue Nov 12, 2019 12:27 pm

I don't believe so. The charity will see that your Proxy/Friend has donated them money and they will get the receipt in their name. You can't just collect other people's donations and deduct them all on your tax return (think about how that could be abused if people "bought" receipts).

If you want to mask your donation for some other reason, then consider a Donor Advised Fund which can send checks anonymously. If Proxy can get some other benefit (as in matching...) then you have gifted that to him along with the donation.
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HomeStretch
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Re: Make donation through proxy (friend) and deduct?

Post by HomeStretch » Tue Nov 12, 2019 12:30 pm

If the payee on the check is your friend, no. If the payee is the charity and your friend is playing mailperson to deliver it in person at a charity event, yes.

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neatp
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Re: Make donation through proxy (friend) and deduct?

Post by neatp » Tue Nov 12, 2019 12:33 pm

Thanks all! Yes this is because my friend has access to a charitable match. I'll send the money but will not deduct it.

HoosierJim
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Re: Make donation through proxy (friend) and deduct?

Post by HoosierJim » Tue Nov 12, 2019 12:52 pm

Sometimes the charity has a benefactor match as well as an employer match resulting in $4 going to the organization for an actual $1 spent. If the donation is really large and the employee is in a high tax bracket (i.e. donation beyond standard deduction), then other taxpayers subsidize the donation further (or possibly a large donation of appreciated stock with a high capital gains tax potential)

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dm200
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Re: Make donation through proxy (friend) and deduct?

Post by dm200 » Tue Nov 12, 2019 1:31 pm

neatp wrote:
Tue Nov 12, 2019 12:33 pm
Thanks all! Yes this is because my friend has access to a charitable match. I'll send the money but will not deduct it.
Makes a lot of sense to me - win - win

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cheese_breath
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Re: Make donation through proxy (friend) and deduct?

Post by cheese_breath » Tue Nov 12, 2019 1:44 pm

I don't know about the legality but I wonder about the ethics of having your friend masquerade as the donor in order to obtain a match you aren't eligible for yourself.
The surest way to know the future is when it becomes the past.

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dm200
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Re: Make donation through proxy (friend) and deduct?

Post by dm200 » Tue Nov 12, 2019 1:48 pm

cheese_breath wrote:
Tue Nov 12, 2019 1:44 pm
I don't know about the legality but I wonder about the ethics of having your friend masquerade as the donor in order to obtain a match you aren't eligible for yourself.
I see your point, but this does not seem an "ethical" problem to me. The friend's employer makes a donation to a good cause and the cause gets twice as much.

Other opinions??

NotWhoYouThink
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Re: Make donation through proxy (friend) and deduct?

Post by NotWhoYouThink » Tue Nov 12, 2019 1:50 pm

Mega Corp will match my donations, they do not extend that offer to the general public.

cjclueless
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Re: Make donation through proxy (friend) and deduct?

Post by cjclueless » Tue Nov 12, 2019 1:51 pm

Please encourage your friend to carefully read the plan rules. Something like this at my company would get you fired. While technically you can gift to anyone and they can do what they choose with the funds, generous matching companies tend to frown on this.

I don't even submit for matching what my spouse donated.

an_asker
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Re: Make donation through proxy (friend) and deduct?

Post by an_asker » Tue Nov 12, 2019 2:01 pm

dm200 wrote:
Tue Nov 12, 2019 1:48 pm
cheese_breath wrote:
Tue Nov 12, 2019 1:44 pm
I don't know about the legality but I wonder about the ethics of having your friend masquerade as the donor in order to obtain a match you aren't eligible for yourself.
I see your point, but this does not seem an "ethical" problem to me. The friend's employer makes a donation to a good cause and the cause gets twice as much.

Other opinions??
I asked a similar question here a while back and the ethics flag was raised. FWIW, in my case, I was not getting any deductions so I mailed a check to relative asking him to make the donation, so he could get the tax deduction.

Personally, I don't see the issue. But I didn't do it after that one time regardless.

an_asker
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Re: Make donation through proxy (friend) and deduct?

Post by an_asker » Tue Nov 12, 2019 2:03 pm

cjclueless wrote:
Tue Nov 12, 2019 1:51 pm
Please encourage your friend to carefully read the plan rules. Something like this at my company would get you fired. While technically you can gift to anyone and they can do what they choose with the funds, generous matching companies tend to frown on this.

I don't even submit for matching what my spouse donated.
I know folks who have done this (a while back) - what I don't know is whether anyone (the proxy donor, to be precise) got the tax deductions as well.

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dm200
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Re: Make donation through proxy (friend) and deduct?

Post by dm200 » Tue Nov 12, 2019 2:09 pm

cjclueless wrote:
Tue Nov 12, 2019 1:51 pm
Please encourage your friend to carefully read the plan rules. Something like this at my company would get you fired. While technically you can gift to anyone and they can do what they choose with the funds, generous matching companies tend to frown on this.
I don't even submit for matching what my spouse donated.
Yes - the rules may be different (or differently interpreted) by different employers. Many years ago, for my first ten years after college - I worked for a MegaCorp that had a "zero tolerance" policy for even the most minor employee "dishonesty" - and employees were fired for such.

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Re: Make donation through proxy (friend) and deduct?

Post by LadyGeek » Tue Nov 12, 2019 5:51 pm

This thread has run its course and is locked (conjecture on ethical issue, no added value to continue). See: Acceptable Topics and Subforum Guidelines
This is an investing and personal finance forum. We also maintain a subforum that allow our members to discuss consumer goods and services and recreational activities. Anything else is considered "Off Topic" and is not acceptable on this forum.
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