A deduction is available for the gifts you make to charities, religious organizations and many other non-profits. But donations cover more than just the cash you give to a charity and the used goods you contribute. When you purchase a ticket to a charitable fundraising event, such as a dinner, some or all of the price you pay can be a deductible donation as well.
Before you can deduct the cost of your charitable dinner ticket, or any other charitable donation, the organization hosting the event must have tax-exempt status. It doesn't matter if the money raised from ticket sales is earmarked for a worthy and legitimate charitable purpose. If an individual or for-profit business organizes the dinner, you can't deduct a single dollar of the ticket's price as a charitable contribution on your return. If you're unsure whether the organization is tax-exempt, you can use the Internal Revenue Service's online “Search for Charity” tool.
Reduce Deduction for Established Charge
Once you confirm that the charitable dinner is being hosted by a tax-exempt entity, you can start to think about how much of the ticket's price constitutes a deductible donation. The tax rules allow you to take a write-off, but since the ticket entitles you to receive a benefit in exchange -- a meal and a night out -- you have to reduce your deduction by the benefit's value. Many charities will indicate how much of the price you can treat as a charitable deduction right on the ticket. For example, if you paid $100 for the ticket, and it states that your donation is $60 and the value of the dinner is $40, the most you can deduct is $60. However, if you don't accept the ticket at the time of making the donation, or send it back to the charity soon after receiving it, you aren't receiving a benefit, and therefore the entire $100 price is deductible. When you accept the ticket but choose to not attend the dinner, however, the tax rules treat your acceptance of the ticket as a $40 nondeductible benefit since possession of it still gives you the option to attend the dinner or to give it to someone who will.
Reasonable Value of Dinner
Your admission ticket might not indicate the value of the dinner, which means you'll have to figure out a reasonable value yourself. The fair market value of the dinner is the amount the organization could charge if it didn't include a charitable donation in the price. It depends on the type of food the organization serves, too. For example, an organization may be able to charge $75 per ticket if it offers a multi-course steak dinner and unlimited cocktails, but not if the meal consists of a simple buffet that doesn't include drinks. You can also come up with a reasonable value by looking into the prices that other charities charge for comparable dinner events and how they allocate the donation and benefit amount.
Enter Deduction on Schedule A
Even though you purchased the ticket from a tax-exempt entity and figured out how much you can write off as a donation, you can't take a charitable contribution deduction unless you itemize on Schedule A. If you do itemize, you'll include the ticket donation in the “Gifts to Charity” section of the form. Keep in mind that itemizing means you're giving up the standard deduction, which is a fixed amount for each filing status that doesn't require you to report specific expenses.
Michael Marz has worked in the financial sector since 2002, specializing in wealth and estate planning. After spending six years working for a large investment bank and an accounting firm, Marz is now self-employed as a consultant, focusing on complex estate and gift tax compliance and planning.