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Deductions and Benefits Received

Donors cannot deduct contributions if they receive benefits in exchange.

• The Tax Court ruled that a woman who made contributions to a religious organization was not entitled to a charitable contribution deduction since the organization provided her with the necessities of life. The taxpayer lives and works at a Christian parachurch ministry devoted to the rehabilitation of drug addicts and alcoholics. Her duties included working as school principal and teacher, leader of religious services, rehabilitation counselor, administrator, clerical worker, cook, and member of ministry's board. She is not an ordained minister. She also is employed in a secular job, and donated all of her secular earnings to the ministry. Members of the ministry live under a covenant whereby they hold no private property and own all material possessions in common. It is as a result of this covenant that the taxpayer turned over her salary to the ministry. The taxpayer lived frugally ...

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Posted:
  • September 1, 1992

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