Donation Receipt

[Burke]

I disagree.
Had the monies been given to her directly and she in turn donated it to the VFW, I would concur she could take the alleged deduction, if eligible. But because it was "funneled through" the VFW, and she worked for them, the only way that would work (IMO) is if the VFW attributed that amount as compensation to her. Note that a similar situation has been discussed on this board before, in regard to "love offerings" made to a church, and given to a minister.

[jsamans]

Obviously, we're all getting pieces of second- or third-hand information here, but this is what I think is going on based on the various explanations provided throughout the thread:

1. Michelle did some substantial amount of volunteer work for the VFW post, providing cleaning services at no charge. We all know and agree that the delivery of services to the VFW does not generate a deduction.

2. People who benefited from Michelle's cleaning services and generosity also knew this, and they wanted to reward her for your time and effort. They therefore took up a collection amongst themselves to raise money that they in turn gave to the VFW Post in her name. The originators of this money receive no deduction for having given the money, because the giving is not attributed to them.

3. The money given to the VFW Post by various people in Michelle's name constitutes for purposes of taxes a series of gifts from each giver to Michelle, who then gave these gifts in the aggregate to the VFW Post. That the money was not handed to her is irrelevant; that the money flowed in this manner would be deemed to have occurred by virtue of the verifiable evidence of contributions. The gifts themselves are each well below the limit that would require filing notice, so there's no problem here.

4. Michelle does not need to claim the gifts as income, and she can claim the deduction to the fullest extent permissible given the VFW Post's tax status and relative to her adjusted gross income.

Thoughts?

[Burke]

As for the $$$ donors, I'm not sure if making a gift "in someone else's name" properly constitutes a true gift by that honored individual. If anything, the folks who forked over the actual funds to the VFW would have the allowable tax deduction.
FE

I agree. Perhaps the VFW did receive such a cash donation from "others." But it cannot be allocated to another person for tax purposes. It would be deductible (assuming a deduction is allowed) by the person(s) who made it. A simple phone call to the VFW office should clarify the whole situation.

[taxea]

Well maybe, they might already be deducting those materials as supplies for the cleaning business.

you could be right about that. So like we have all said all along....no donation.

[David1980]

materials to do the cleaning is to the non-profit.

Well maybe, they might already be deducting those materials as supplies for the cleaning business.

[taxea]

no matter what the letter places the donation value at the IRS dictates what of that is deductible. The donations made by others were made in her name??? Labor is not deductible, materials to do the cleaning is to the non-profit.

[Kram BergGold]

No Deduction and No Inocme

We have already established that the donation of services does not give rise to a charitable contribution.
Michelle has no proof that she paid the VFW $9,500 via check, credit card or cash, so again nothing to deduct.
If Michelle, volunteered her services to the VFW she does not get a 1099, she was not paid for services rendered.
Not to mention that the VFW does not qualify to begin with.

[FEDUKE404]

Possibly no donation at all?

I simply cannot understand the logic. . .or lack thereof. . .that is occurring here.

For Michelle, it would appear at best that she has no VFW income for her cleaning service and no personal deductions for her charitable work except for some possible consideration of allocated (NON Schedule C) direct VFW expenses. That could be tough to determine. This assumes Michelle is actually filing a Schedule C and Form SE (you did mention she has "three workers"). IF that is correct, then you have to rationalize she is giving about ~$800/month of "free" services from her business? ? ?

As for the $$$ donors, I'm not sure if making a gift "in someone else's name" properly constitutes a true gift by that honored individual. If anything, the folks who forked over the actual funds to the VFW would have the allowable tax deduction. This also assumes the money was documented by the VFW, not a "gift in kind," nor something that would have to be reduced for value received (like a Friday night fish fry).

If I'm reading your explanation properly, you are stating that at least $10k of cash was actually donated to the VFW, supposedly for "cleaning services," by individuals other than Michelle? From afar, it might appear the VFW folks who are generating the donation receipts might have some issues of their own to resolve.

FE

[S T]

I have the contribution letter

As stated in prior post here is the verbage "thank you for donation to the Veterans of Foreign Wars Post ###. Your donation of $9,500 to the post will go a long way in helping with our building. Enclosed you will find our nonprofit number (noted on the VFW letterhead)"

No note on services or cash donation

A lot of MIXED signals on this

Sandy

[David1980]

"Michelle volunteered her services"

As far as services, see "Value of Time or Services" in publication 526. https://www.irs.gov/publications/p52...link1000229698

"it was a group of people that donated the money, but did it under her name."

Now we're talking about a cash donation? You have the contribution letter? Does it indicate that cash was donated of $9,500 or services or some combination? Seems like a mixed signal there - is it for a donation of services, or is it for a donation of cash.

[S T]

Here is an explanation from the client's Mother "Michelle volunteered her services (with her cleaning company). They presented all three workers with contribution letters, she was given one for $9500.00. So she should get what form to fill out, since this is not for trade nor was she paid by them. She just received this a few days ago and it was a group of people that donated the money, but did it under her name. She asked who did this and they all stood up. She was overwhelmed and just needed some advise on how to do this deduction when she claims her taxes next year."

Now I am really confused

Sandy

[taxea]

In order for her to deduct anything they must be registered with the IRS as a non-profit. If she does not have a cleaning business she can only deduct the cleaning supplies as a donation. Her labor is not deductible. If they do send a 1099misc that would not be proper.
If they are not a non-profit she has no deductions. No Sch C if they did not pay her and no expenses on Sch C or Sch A.

[TaxGuyBill]

I don't prepare non-profit returns, but I believe that in many cases the Fair Market Value of donated services are required for the non-profit's financial accounting. I suspect that is the reason for this receipt.

[S T]

Here is the verbage from Veterans of Foreign Wars of the U S of America, Post ###, and signed by the Commander of that VFW Post

"thank you for donation to the Veterans of Foreign Wars Post ###. Your donation of $ 9,500 to the post will go a long way in helping with our building. Enclosed you will find our nonprofit number (noted on the VFW letterhead)"

I find it odd that they would issue a donation statement, for services - I do know and understand those rules.

I am going to suggest to the daughter that she contact them to see if they are issuing a 1099 Misc form or not for year 2015. I also find it odd that the VFW is issuing a donation statement in November 2015, unless the daughter is no longer providing services.

This was an inquiry from the taxpayer and wondering what implications for taxes there are for year 2015.

thanks for all of the posts

Sandy

[Uncle Sam]

Donation Receipt

Roland- I believe you're reading more into this and creating a defense where it doesn't exist.
Donation of time (services) is not deductible, no matter what type of organization it is.
You know as well as the rest of us - that it's either cash or property that is counted for charitable donations.
And even if made to a foundation - donation of services is not tax deductible.