we’ve been trained that cookie donations are not tax deductible. Can u clarify?
This question is actually in response to something that I posted on twitter about the Girl Scout “Cookies from Home” program. I thought it was a good question and I posted my gut reply which was:
As a tax atty, I would also say yes. $ donated to charitable org for charitable cause, nothing received.
(Quick explanation: you are limited to 140 characters per “tweet” on twitter, hence the short phrases.)
I wanted to expand on this question because I thought it touched on some really good issues. To qualify as a charitable gift, a donation must be made to a charitable organization with no strings attached. If there is any benefit (other than warm fuzzies) to the donor, the value of that benefit must be subtracted from the value of the gift. For example, if you pay $100 for a charitable dinner and the value of the dinner was $30, your charitable donation is $70. Make sense?
In the case of the Girl Scouts, Girl Scouts of the USA is a nonprofit 501(c)(3) organization. The “Cookies from Home” program allows you to pay for the cost of a box of cookies and instead of taking the cookies home and eating them (even though you know you want to), the Girl Scouts will send them to our military personnel abroad. The cost of the donated boxes is tax deductible to you.
In contrast, if you were to buy a box of cookies and just give them to a homeless person or other person in need, it would not be deductible.
The key difference between the two scenarios is the charitable organization – you cannot deduct money or the cost of goods donated to an individual or noncharitable organization, no matter how deserving. For more on this, check out my prior post.
And here’s the official word from Girl Scouts:
Q: Is the purchase of Girl Scout Cookies tax-deductible?
A: No and Yes.
No, if the customer keeps the cookies. Individuals who buy Girl Scout Cookies and take the cookies home, or consume them, have purchased a product at a fair market value. For this reason, no part of the price of a box of Girl Scout Cookies used in this way is tax-deductible.
Yes, if the customer leaves the cookies with Girl Scouts. Many Girl Scouts ask customers to pay for one or more boxes of cookies for use in their community service project or “gift of caring,” for example, collecting for a food pantry. The customers not receiving any Girl Scout Cookies do not benefit directly from paying for them. Those individuals may treat the purchase price of the donated cookies as a charitable contribution.
So, if you’re in the mood to help out, consider donating the cost of a box of Girl Scout cookies. Don’t forget your receipt!
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Like any good lawyer, I need to add a disclaimer: Unfortunately, it is impossible to give comprehensive tax advice over the internet, no matter how well researched or written. Before relying on any information given on this site, contact a tax professional to discuss your particular situation.