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Couple's Charitable Contribution Deductions Denied after Failing to Meet Precise Requirements

Key point. Charitable contribution deductions are subject to a variety of substantiation requirements depending on the type and amount of a contribution. Failure to comply with these requirements can result in loss of a deduction.

The United States Tax Court ruled that a married couple was not entitled to a charitable contribution deduction for scholarships they made to three students using funds from a memorial account they established in the name of their deceased son. In 2006, a married couple received $75,000 in life insurance proceeds from the death of their son. That same year, the couple used the life insurance proceeds to establish a scholarship fund in honor of their son. The scholarship fund was structured as an irrevocable trust. The trust agreement states that income from the trust is to be used exclusively for educational purposes. The trust is irrevocable, although the couple ...

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Posted:
  • February 23, 2016

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