If private school tuition is $20,000 and the school allocates $2,000 of it to fund its financial aid programs, can the $2,000 be claimed as a charitable contribution?
If not, why is a subsequent $2,000 gift which is earmarked for financial aid deductible?
Mitch
Normally anything given, even to a charitable organization, in exchange for something is a payment, not a gift. If the payment is clearly for more than the value of what is received, the excess may be deductible. But if payment is required, you'll be unlikely to prove the actual value is lower than what you paid.
Because it's voluntary, and nothing is (supposedly) given in return. The fact that it is earmarked is not a problem as long as the defined use for the gift is within the stated exempt purpose of the organization, and the organization agrees.
Stu
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