How should a church receipt charitable contributions for a married couple who gets divorced during the year? Proper handling is essential to ensure compliance with tax regulations and to avoid confusion.
General Guidelines for Receipting Contributions
In most cases, apportionment of income and deductions follows the source of the income. For charitable contributions:
- Wage income is allocated to the spouse who earned it, as reported on their Form W-2.
- Personal deductions, like charitable contributions, are generally divided equally unless evidence shows a different allocation is appropriate.
- If an asset solely owned by one spouse is donated, any tax implications related to that asset should be attributed to the owner.
How Churches Should Allocate Contributions
A church should generally assume that charitable contributions made by a couple prior to their divorce are split equally between the two. For example:
- If a couple divorces in November, the total contributions made before the divorce should be divided equally.
- Each spouse should receive a receipt reflecting 50% of the total contributions made during the year up to the time of the divorce.
This approach ensures fair allocation and simplifies record-keeping for the church.
Exceptions to Consider
There may be situations where a court order specifies how deductions should be allocated. For instance:
- A divorce decree or property settlement may dictate a different allocation.
- In such cases, the church should follow the court’s directives when issuing contribution receipts.
Best Practices for Churches
To ensure compliance and clarity:
- Maintain detailed records of contributions throughout the year.
- Consult with legal or tax professionals if court orders or unique circumstances arise.
- Communicate with donors to clarify how their contributions will be allocated and receipted.
Conclusion
Properly receipting contributions from divorced couples is essential for accurate records and legal compliance. In most cases, an equal split is appropriate unless directed otherwise by a court. By following these guidelines, churches can navigate these situations effectively.
FAQs
Can a court override the 50/50 split rule?
Yes, a court order can specify a different allocation for deductions.
Can one spouse claim the entire contribution as a deduction?
Only if evidence shows the contribution was made solely from that spouse’s income or assets.
What if the couple made separate contributions?
The church should issue receipts reflecting each individual’s contributions separately.
Should the church consult a lawyer for these situations?
Consulting legal or tax professionals is recommended for court-ordered or complex cases.