A band performs a gig for a registered U.S. charity free of charge. They receive a letter acknowledging their gift of a free performance valued at $10,000. What is anyone's take on the correct tax deduction for the band?
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Tax Professional Answers
John Stancil
There are a couple of issues here. First, the charity does not set the value of the merchandise or services received. All they do is give the band a letter, stating what was received. Second, the band cannot deduct the value of their services, only the out-of-pocket costs of the performance. For example, they could deduct travel expenses involved, any costs involved in setting up the stage (assuming they paid an outside party do so), or similar items.
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502 weeks ago
Question Owner
I agree with John's answer. However I have run across more than one band being told by their "Tax Professionals" this is a legal charitable deduction.
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502 weeks ago