Valuing a dinner party for tax purposes?

[HardDrive]

Last year, my wife and I contributed a dinner party to my kids school. It went for $3400. I don't have a break down of the costs, but I would think we put at least $2000 out of pocket into holding the party.

Anyone happen to know off the cuff how the IRS treats this?

And yes, I'm sitting here wringing blood from stones trying to get my tax bill down.

[Zeke]

Originally Posted by HardDrive

Last year, my wife and I contributed a dinner party to my kids school. It went for $3400. I don't have a break down of the costs, but I would think we put at least $2000 out of pocket into holding the party.

Anyone happen to know off the cuff how the IRS treats this?

And yes, I'm sitting here wringing blood from stones trying to get my tax bill down.

You won't get far with the IRS given that statement. I don't do a lot of charity contributions, but I have managed to find up to 500 each year. This time around I didn't even try. Clothes to Goodwill have to be photographed and cataloged. Not worth the hassle. Contributions to a church now need a receipt. I haven't sat in a pew and dropped money in the contributions so I don't know if you are supposed to take a ticket out and fill it out yourself or take your money to the church office.

You need records.

[HardDrive]

Originally Posted by Zeke

You need records.

I've got records.

My basic question is weather I can deduct the actual value that it sold for at auction, or only the amount of $ I spent on supplies/services for the party.

[tevake]

Two Gs for a dinner party, either a very large party, or a very very nice dinner party.
Nice contribution.

Cheers Richard

PS I wouldn't go past your costs

[HardDrive]

Originally Posted by tevake

Two Gs for a dinner party, either a very large party, or a very very nice dinner party.

5 course Indian dinner for 8 people held at the lake shore home of one of the members of Pearl Jam. Indian dancers brought in to entertain, full bar, staff....we didn't go cheap on them.

[Zeke]

Originally Posted by HardDrive

I've got records.

My basic question is weather I can deduct the actual value that it sold for at auction, or only the amount of $ I spent on supplies/services for the party.

I guess if you had asked that in the first place, you could have gotten the good advice you eventually got sooner. I know that to have a deductible entertainment expense, you need the date, time, place, names and purpose. IOW, a complete log. I quit doing entertainment deductions 10 years ago.

[Seahawk]

I agree with the below, only question is qualification of the folks you donated to.

See here: Eight Tips for Deducting Charitable Contributions

Originally Posted by NotaBRG

This has come up before but it was a car that was donated.

The person doing the donating can deduct the value of the item donated regardless of what it sells for. The person buying the item can only deduct the difference between what the item is worth and what they paid for it.

So in you case, you can deduct the actual amount you spent on the donation. The person who bought the meal can deduct the difference in what they paid and what it was worth.

*NOTE The above statements are what I remember reading in the codes and are not to be taken as tax advice.

[Jferr006]

I have no idea but, I'm clearly going to the wrong dinners

[aigel]

Originally Posted by Zeke

You won't get far with the IRS given that statement. I don't do a lot of charity contributions, but I have managed to find up to 500 each year. This time around I didn't even try. Clothes to Goodwill have to be photographed and cataloged. Not worth the hassle. Contributions to a church now need a receipt. I haven't sat in a pew and dropped money in the contributions so I don't know if you are supposed to take a ticket out and fill it out yourself or take your money to the church office.

You need records.

Sorry for the highjack:

I'd like to hear more about these photographs for Goodwill donations. What good are the receipts they give me when I drop stuff off? Is this something to ensure your claims are bullet proof in an audit, or is it a requirement to have pictures, nowadays?

G

[RWebb]

Originally Posted by HardDrive

I don't have a break down of the costs, but I would think

you have a problem as you need to prove anything you claim

can you recover receipts and FULL records??

or maybe call a caterer to get an estimate and use that

worse case is the IRS throws you into prison where you will not need to file for taxes (I kid!) - just back taxes and interest; maybe penalties

is the auction a measure of full market value???

earlier you could have just called the IRS - yes, they ANSWER tax questions! but now you'll never get thru

[MRM]

This is what I recall. I am reasonably sure I'm right.

You can only take a charitable deduction if it's a registered charity. The school will have to tell you whether their fundraiser qualifies. It probably does, but you have to check to make sure. Then you get to deduct your actual cost - to the extent that you have actual receipts to show your expenses. If you don't have a receipt for it you can't claim it.

The person who bought the dinner gets to deduct the amount they paid over your costs of hosting the dinner. If you took the full retail value it would be double counting the deduction.

[Zeke]

Originally Posted by aigel

Sorry for the highjack:

I'd like to hear more about these photographs for Goodwill donations. What good are the receipts they give me when I drop stuff off? Is this something to ensure your claims are bullet proof in an audit, or is it a requirement to have pictures, nowadays?

G

I use a CPA to file taxes. This is what I'm told. Last year I gave the CPA the drop off receipts and an item by item list with the standard allowable deduction, e.g., a clean good t-shirt is something like a buck and a coat is 5 bucks or more. This year they 'suggested' photos to go long with the itemized list.

See the guide.