In a charitable benefit for a sick individual, Is there a way to make the event "official" so that donations are tax deductable ? (Thereby compelling people to donate more). Of course it is a moot point if the receiver of the donation has to pay taxes on what is brought in. How are these things properly set up?
thanks
Find a fiscal agent that is a 501(c)(3) certified nonprofit, that has an exempt purpose consistent with aiding the person you are raising money for. If they agree, checks will be made out to them, they will keep a processing fee (generally around 5%), and they will either turn the money over to you or spend it for the exempt purposes you proposed.
Gifts are not taxable to the recipient. Stu
Contributions which are earmarked or are received by a charity under an understanding or commitment that they be used for a specific individual don't qualify for an income tax deduction. Under the tax code, these are gifts to the individual. If they exceed $12,000 in a year to a particular individual, the donor would be obligated to file a gift tax return. As gifts, the recipient would not be suject to any tax on the amounts received.
--Chris
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