how to make a donations tax deductible

msratt · #1 Aug 27, 2007, 06:48 AM

Hi,

A officer in my county has been injured in an car accident. His fellow officers are doing fund raising efforts for him and his family. An account has been set-up in his name at the local bank is it possible to make donations to this account tax deductible for donors?

ebaines · Aug 27, 2007, 10:52 AM

No - gifts to individuals can't be deducted. And you wouldn't be able to set the fund up as a 501(c)(3) because no funds from a 501(c)(3) can be directed to the benefit any designated individual.

ebaines · Aug 28, 2007, 05:52 AM

Quote:

Originally Posted by ScottGem

What if the fund was setup as a trust for the officer's family?

I don't believe it would qualify as tax-exempt. This would actually be a foundation which would make grants to certain individuals. Foundations like this may be tax-exempt, but only if they comply with a whole bunch of IRS regulations - too many to list here, but if you go to the IRS web site there's lots of info on how to set up both charities and foundations.

The key to a foundation making grants to individuals is that it the criteria must be non-discriminatory. So it may be OK to set up a Foundation that will provide scholarships for Police Officers and their families, but I don't think you can set one up that makes grants solely to a particular family. Now, perhaps a smart lawyer could figure out how to word the foundation's charter so that it passes the non-discriminatory test while still directing the money where it's intended - perhaps limiting grants to officers whose residence is in a certain town and who are wounded on the job between June and August 2007? But I suspect the IRS would see right through that ruse. Again, a smart lawyer would know a lot more about this than I.

CaptainRich · Aug 28, 2007, 06:11 AM

Quote:

Originally Posted by msratt

Hi,

A officer in my county has been injured in an car accident. His fellow officers are doing fund raising efforts for him and his family. An account has been set-up in his name at the local bank is it possible to make donations to this account tax deductible for donors?

How much are you "donating" that you will need to itemize it and deduct it?



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