In order for a contribution to be deductible for income tax purposes, the contribution must meet 6 general requirements. In our previous post we discussed the gift of cash or property. In our post today we will discuss what types of organizations can receive contributions and provide substantiation to the donor in order to deduct the donation for income tax purposes.
Requirement #2 for contributions is that the donation of cash or property must be made to or for the use of a qualified organization.
What is a qualified organization? Section 170 of the Internal Revenue Code defines these organizations, meeting the following definitions:
a corporation, trust or community chest, fund or foundation that is or has been:
>created/organized in the U.S. or U.S. possession; State or District of Columbia
>organized and created exclusively for religious, charitable, scientific, literary or educational purposes, and which
>no part of the net earnings of the organization inure to the benefit of any private shareholder or individual, and
>which is not disqualified for tax exemption under section 501(c)(3) by reason of attempting to influence legislation and which does not intervene in any political campaign on behalf of any candidate for public office.
Contributions are allowed if made to or for the use of a church or other 501(c)(3) organizations.
See our next post relating to a personal benefit received by the donor.
