About Donations, Purchases, Fair Market Value and the IRS
The information on this page applies only to those people who file federal income tax returns in the United States, which is basically any citizen or resident of the United States.
Joe Beasley Memorial Foundation Inc. is a U.S. registered 501(c)(3) tax-deductible nonprofit organization. The IRS has very specific regulations concerning the eligibility of donations to such organizations for tax purposes. We will summarize these regulations simply and clearly below.
When you make a "purchase" on this Web site, you are making a tax-deductible donation to Joe Beasley Memorial Foundation Inc. AND you are also receiving a benefit (the product you are "purchasing") as a result of making that donation.
The IRS allows you to consider as a tax-deductable donation only the amount of the donation which is over the fair market value of the benefit you receive. Let's look at an example.
Let's say you "purchase" a CD on our Web site for which you make a $25 donation. And let's suppose the fair market value of the CD is $15. According to IRS regulations, the entire $25 donation does not qualify as a charitable contribution, but only the part of the donation which is above the fair market value of the CD, which in this case would be $10 ($25 donation minus $15 fair market value). So for this example, the IRS would allow you to claim a $10 charitable contribution as tax-deductable.
In compliance with IRS regulations, if the total amount of your "purchase" exceeds $75, we will mail you a statement which shows the dollar amount of your donation, the fair market value of any benefits (products) you received, and the resulting amount that the IRS will allow as a tax-deductible contribution.
In compliance with IRS regulations, at the beginning of each year we will mail you a statement of the previous year's donations which you have made to Joe Beasley Memorial Foundation Inc. The statement will list all of the donations you made, the fair market value of any benefits (products) you received, and the resulting amounts that the IRS will allow as tax-deductible contributions.
For more details, follow these links to the IRS Web site:
Publication 526 (2007), Charitable Contributions From Which You Benefit
http://www.irs.gov/publications/p526/ar02.html#d0e589
FAQs 3.3: Gifts and Charitable Contributions
http://www.irs.gov/faqs/content/0,,id=199873,00.html
Charitable Contributions - Quid Pro Quo Contributions
http://www.irs.gov/charities/charitable/article/0,,id=123201,00.html
Charitable Contributions Substantiation and Disclosure Requirements (PDF)
http://www.irs.gov/pub/irs-pdf/p1771.pdf