Many of our clients are supporters of the college football programs at both Clemson University and The University of South Carolina. The contributions that were once allowed under the “80/20 rule,” allowing a donor to deduct 80% of the contribution while disallowing 20% as the cost of the football tickets, are no longer allowed at all.
In the new tax law, contributions that come with a right to purchase college athletic tickets are 100% disallowed. This means that as of Jan 1, 2018, donors who contribute to or for the benefit of a college or university in exchange for the right to purchase tickets or seating at an athletic event in the university’s stadium can no longer take a charitable deduction on 80% of the contribution.
Donations not conferring any right to purchase season tickets generally remain deductible.
While both colleges have stated that they feel the change in law won’t have any impact on donations, I will be interested to see what you guys say when we meet later on. Will you still make your annual contributions in the same amount, or has the loss of the tax deduction changed your minds?
Please keep this new law in mind as you gather your tax return information for 2018. If you have questions for us, please let us know.
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