This is a common question for people who receive free tickets to events and want to donate them to charity. The short answer is maybe. There are a few factors that determine whether donated tickets can be claimed as a tax deduction.
What are the requirements for deducting donated tickets?
In order for donated tickets to qualify as a tax-deductible charitable contribution, the following requirements must be met:
- The recipient organization must be a qualified 501(c)(3) charity.
- You must itemize your tax deductions using Schedule A to claim the deduction.
- The value claimed for the donation must be the fair market value of the tickets.
- You must have proper documentation from the charity acknowledging the donation.
Let’s examine each of these requirements in more detail:
501(c)(3) qualified charity
The recipient organization must have 501(c)(3) status from the IRS. This means they are approved as a tax-exempt public charity. You can verify an organization’s 501(c)(3) status by checking the IRS database at https://www.irs.gov/charities-non-profits/tax-exempt-organization-search. Things like donating tickets to friends, family, coworkers or even selling them does not qualify for a tax deduction.
Itemizing deductions with Schedule A
To claim a deduction for donated tickets, you must itemize deductions on Schedule A of your tax return. The value of the donated tickets is claimed along with your other itemized charitable donations. If you claim the standard deduction instead, you cannot specifically deduct the tickets.
Fair market value
You can only deduct the fair market value of the tickets, which is generally the face value price printed on the ticket. Any additional value you may place on desirable seat locations or high demand events does not increase the deductible amount. The charity may provide you with a letter acknowledging the donation that includes their good faith estimate of the fair market value.
Proper documentation
You’ll need to obtain documentation from the charity that includes the date of the donation and a reasonable estimate of the fair market value. Many charities have specific donation forms or templates they use for this purpose. This documentation must be retained along with your other tax records to support the deduction claimed.
What types of tickets can be deducted?
The most common types of tickets that can be donated and deducted include:
- Sporting event tickets
- Concert or theater tickets
- Airline tickets
- Fundraising event tickets
- Raffle tickets
Essentially any ticket that normally requires a payment and has a set face value amount may qualify. Tickets that involve a required “donation” or payment above face value may only allow deduction of the base ticket price.
How is the deduction calculated?
As mentioned earlier, the deductible value is the fair market value, generally the face value printed on the ticket. For example:
- You donate 2 tickets to a charity fundraising dinner. Face value printed on each ticket is $100. You can deduct $200 as the charitable contribution.
- You donate 4 tickets to a professional basketball game. Face value printed on each ticket is $60. You can deduct $240 as the charitable contribution.
The full face value can be deducted even if you originally received the tickets for free or at a discount. However, there are some exceptions:
- Airline tickets – only 50% of the face value can be deducted if the tickets were provided to you at no cost.
- Raffle tickets – you can only deduct the amount you paid to purchase the tickets.
You cannot try to deduct an amount in excess of face value even if you feel the tickets have a higher value. The fair market value requirement limits the deduction to just the face value.
What about service fees or other ticket costs?
When donating tickets, you can only deduct the face value as described above. Any additional charges you may have paid such as services fees, shipping, or parking do not increase the deductible amount. For example:
- You donate 2 concert tickets with a face value of $75 each. After fees, you paid $180 total for both tickets. You can only deduct $150 as the charitable contribution.
Basically, anything over the printed ticket face value is not deductible, even if you initially paid more for the tickets.
What records should you keep?
If you claim a deduction for donated tickets, the IRS recommends keeping the following records in case the deduction is ever questioned:
- Receipt from the charitable organization listing the date, number of tickets donated and the estimated fair market value
- Any documentation showing the price paid for the tickets
- Proof of payment such as credit card statement or cancelled check
Having detailed records can help verify the deduction amount if the IRS ever requests additional information.
What are some common donation scenarios?
Here are some common scenarios for donating tickets and how it impacts your taxes:
Scenario | Tax Treatment |
---|---|
You donate 2 tickets you already used yourself to a charity auction | No deduction allowed since you used the tickets |
You donate 6 raffle tickets to a qualified charity | Deduct actual amount you paid for the raffle tickets |
You donate 4 tickets won as a prize to a charity event | Deduct the face value printed on the tickets |
You donate 8 tickets purchased for family but never used | Deduct the face value printed on the tickets |
You donate 2 airline tickets you received for free from your credit card points | Deduct 50% of the face value printed on the tickets |
As you can see, the key things to determine are whether the tickets were used, how you obtained them and any printed face values.
Are there any limitations?
There are a few limitations to keep in mind when deducting donated tickets:
- You can only deduct the amount that exceeds 2% of your adjusted gross income
- Total charitable deductions are limited to 60% of your adjusted gross income
- Non-cash donations are limited to 50% of your adjusted gross income
So for example, if your adjusted gross income is $100,000 you could deduct up to $50,000 in non-cash donations which includes donated tickets. Amounts over the limits can generally be carried forward up to 5 additional years.
What about state tax rules?
When donating tickets, you should review your own state’s tax laws regarding charitable contributions. Some key things to check:
- Does your state allow charitable deductions for donated tickets?
- What records or documentation may be required?
- Are there any deduction limits?
Many states use the federal AGI limits. However, check with a local tax professional to ensure you meet your own state’s requirements for claiming donated tickets if you itemize.
Conclusion
Donating tickets to charity can be a great way to support a good cause. With proper documentation and an understanding of tax deduction rules, you may also receive a nice tax benefit. The key things to remember are:
- Make sure the charity has 501(c)(3) status
- Only deduct face value, not what you paid
- Keep documentation from the charity
- Review deduction limits based on your AGI
With some planning, you can take advantage of this deduction opportunity and generously support an organization’s mission. Just be sure to consult with a trusted tax professional for personalized advice on your own situation.