Terry pays $8,000 this year to become a charter member of Mammoth University's Athletic Council.The membership ensures that Terry will receive choice seating at all of Mammoth's home basketball games.In addition,Terry pays $2,200 (the regular retail price)for season tickets for himself and his wife.For these items,how much qualifies as a charitable contribution?

Question

Quizplus · Accepted Answer

The portion of Terry's payment that qualifies as a charitable contribution is the amount that exceeds the fair market value of the benefits he received ($2,200 for season tickets). So, the charitable contribution is $8,000 - $2,200 = $5,800. Therefore, the total amount that qualifies as a charitable contribution is $5,800 + $600 (half of the season tickets price for Terry's spouse) = $6,400.

Terry Pays $8,000 This Year to Become a Charter Member