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IRS Addresses Designated Contributions

Helpful guidance for church treasurers.

Private Letter Ruling 9733015

Background. Every church has received contributions designating a specific project or use. It is important for church treasurers to understand the tax implications of such gifts. Are they tax-deductible? Should the church issue the donor a receipt acknowledging the contribution? Can the donor claim a tax deduction on his or her tax return? A recent IRS ruling addresses this important topic. While the case involved a university, it is directly relevant to churches.

Facts. A university owned several fraternity houses. Over the past several years, the physical condition of the fraternity houses declined to such an extent that student safety was jeopardized. As a result, university officials launched a fund-raising drive to help finance the cost of reconstructing and remodeling the fraternity houses. Donors were encouraged to contribute for the renovation of a specific ...

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