Question:

To All,
Does anyone have experience dealing with IRS regulations in this regard? We currently require a $250 donation, per holder, for anyone wishing to have seats in the best six sections of our arena for men's basketball. What would you recognize as the value of this type of perk? I am hoping that it is not $250.
- Brad Bross, Drake University

Responses:

Brad,
As I understand the regulation, you must first deduct the value of any goods or services the patron receives in exchange from the donation amount of $250, then apply the 80/20 rule since the patron is receiving seating priority for their $250.

Example; If the patron must purchase their tickets on top of the donation and do not receive anything of else of value, such as free parking, then the entire $250 falls under the 80/20 rule. Thus, the patron should receive a receipt for a $200 donation. If they receive free parking and you charge others to park, the value of the parking should be deducted from the $250 before applying the 80/20 rule.
- Chuck Maes, University of Montana

That is the way we are handling it at GT as well.
- Mollie Simmons Mayfield, Georgia Tech

Brad,
I think the ticket holder can claim 80% as a deductible gift, but I would really encourage you to check with your university tax consultant.
- Glenn Tompkins, Purdue University

Brad,
Our 12th Man Foundation receipts the full amount of each donation and notes on the bottom of each receipt that if the donor exercises their right to purchase priority seating season tickets, then they can only claim 80% of the donation on their taxes.
- David Roubion, Texas A&M University