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Charitable Contributions - Part 1

• Attempts by lottery and sweepstakes winners to assign their earnings to churches present legal as well as ethical issues. To illustrate, the Tax Court recently was asked to determine whether the winner of a $50,000 sweepstakes prize could claim a charitable contribution deduction for his assignment of the prize to a church. The taxpayer had attempted to donate the $50,000 to his church prior to receiving it by instructing the sweepstakes sponsor to pay the prize directly to the church. In denying a charitable contribution deduction, the court noted that the $50,000 had not yet been distributed. And, even if the $50,000 had been distributed directly to the church pursuant to the taxpayer's instructions, the taxpayer "would be required to report that amount as income before claiming a charitable contribution …. A subsequent attempt to assign the winnings to his church would not ...

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  • July 1, 1988

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