Is the cost of a Kiddush deductible?

[ira smilovitz]

I'm involved in a discussion on a synagogue treasurer's list regarding the deductibility of payments to sponsor a kiddush.

Some background for those who aren't Jewish... The end of services on Sabbaths and holidays is marked by a "meal", often referred to as a kiddush. The meal can be as simple as some wine/grape juice and challah (bread) or as elaborate as a multi-course sit-down banquet (but must still contain the wine/grape juice and challah).

Congregants (or others) may donate money to the synagogue to defray the cost of the kiddush or to sponsor it. It is common for people to sponsor a more elaborate kiddush (that is, more than the minimum; not necessarily the blow-out banquet) to commemorate life cycle events/milestones.

The question under debate is whether the donations to sponsor the kiddush are deductible contributions. I say they are because the contribution is directly related to the religious purpose of the synagogue. That is, a kiddush is required and there is no religious limitation on the upside.

Those who say they are not are focused on the meal/personal expense aspect or that you are providing personal benefits to guests.

Any thoughts from the pros here? I've been looking for any relevant citations but haven't found any (and don't expect that the issue has ever been adjudicated).

Ira Smilovitz

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[JoeTaxpayer]

On 7/6/12 1:22 PM, ira smilovitz wrote:
> I'm involved in a discussion on a synagogue treasurer's list regarding the deductibility of payments to sponsor a kiddush.

I'm going to bet that the proper paper trail will show the donation to
be toward the Rabbi's discretionary fund. The treasurer would then
account for anything else.

I'm thinking this compares to my making a donation to a private high
school scholarship fund. That would be a deduction. But if I were to pay
for a particular individual's tuition, probably not.

[Bob Sandler]

I want to add to Ira's background description a factor that
I think is significant in determining whether sponsoring a
kiddush is a deductible contribution. The kiddush is not a
private meal for invited guests of the sponsor. It's open to
everyone who attended the religious services, whether or not
they have any relationship with the sponsor. The kiddush is
a function that is provided by the synagogue for all the
people who attended services. The person who sponsors it is
underwriting the synagogue's cost of providing the kiddush.

Under those circumstances, in my opinion (without any
citations), the money that the sponsors contribute is
clearly a deductible contribution to the synagogue.

On rare occasions, someone who is celebrating a life-cycle
event will have a private kiddush that is open only to their
invited guests. It's not a synagogue function. In this case,
I don't see it as a deductible contribution. It's no
different from inviting people to a private catered luncheon
or dinner. But this is the rare exception. In most cases the
kiddush is a synagogue function that is open to all, as I
described above.

Bob Sandler

[ira smilovitz]

On Friday, July 6, 2012 1:58:45 PM UTC-4, joetaxpayer wrote:
> On 7/6/12 1:22 PM, ira smilovitz wrote:
> > I'm involved in a discussion on a synagogue treasurer's list regarding the deductibility of payments to sponsor a kiddush.
>
> I'm going to bet that the proper paper trail will show the donation to
> be toward the Rabbi's discretionary fund. The treasurer would then
> account for anything else.

No. The paper trail is a check payable to the synagogue or, in some cases, to the Kiddush Fund.

Ira Smilovitz

[JoeTaxpayer]

On 7/6/12 5:25 PM, ira smilovitz wrote:

> No. The paper trail is a check payable to the synagogue or, in some cases, to the Kiddush Fund.

I think Bob's answer is it. The distinction between the open event, vs a
closed one.

[Stuart A. Bronstein]

Bob Sandler <bob_u...@yahoo.com> wrote:
> ira smilovitz <ira.sm...@gmail.com> wrote:
>
>>I'm involved in a discussion on a synagogue treasurer's
>>list regarding the deductibility of payments to sponsor a
>>kiddush.
>>

>>The question under debate is whether the donations to sponsor
>>the kiddush are deductible contributions. I say they are
>>because the contribution is directly related to the religious
>>purpose of the synagogue. That is, a kiddush is required and
>>there is no religious limitation on the upside.
>>
>>Those who say they are not are focused on the meal/personal
>>expense aspect or that you are providing personal benefits to
>>guests.

Seems to me that might be relevant to whether or not what is served
is taxable income to the participants, but should be irrelevant as
to whether or not the contribution funding the function is
deductible to the donor.

> The kiddush is not a
> private meal for invited guests of the sponsor. It's open to
> everyone who attended the religious services, whether or not
> they have any relationship with the sponsor. The kiddush is
> a function that is provided by the synagogue for all the
> people who attended services. The person who sponsors it is
> underwriting the synagogue's cost of providing the kiddush.
>
> Under those circumstances, in my opinion (without any
> citations), the money that the sponsors contribute is
> clearly a deductible contribution to the synagogue.

I agree with that.

___
Stu
http://DownToEarthLawyer.com

[Seth]

In article <ce5db2a4-4c4b-4353...@googlegroups.com>,

ira smilovitz <ira.sm...@gmail.com> wrote:

>Any thoughts from the pros here? I've been looking for any relevant citations but haven't found any (and
>don't expect that the issue has ever been adjudicated).

I'm not a pro, but I'll chime in.

It would seem to me that the cost is almost entirely deductible. I'll
make up numbers to illustrate my reasoning.

Suppose the minimum contribution (to provide wine and challah only)
was $50. A congregant decides to contribute $550 for a more elaborate
meal. He and his immediate family constitute 1% of the attendees.
Then I would say that $5 of the excess $500 was the benefit provided
to him, and the other $545 was deductible. I wouldn't argue with
someone who said the benefit was too minimal to matter so the entire
amount was deductible.

Seth

[Barry Margolin]

In article <XnsA088988ABE33Ds...@130.133.4.11>,

"Stuart A. Bronstein" <spam...@lexregia.com> wrote:

> Bob Sandler <bob_u...@yahoo.com> wrote:
> > ira smilovitz <ira.sm...@gmail.com> wrote:
> >
> >>I'm involved in a discussion on a synagogue treasurer's
> >>list regarding the deductibility of payments to sponsor a
> >>kiddush.
> >>
> >>The question under debate is whether the donations to sponsor
> >>the kiddush are deductible contributions. I say they are
> >>because the contribution is directly related to the religious
> >>purpose of the synagogue. That is, a kiddush is required and
> >>there is no religious limitation on the upside.
> >>
> >>Those who say they are not are focused on the meal/personal
> >>expense aspect or that you are providing personal benefits to
> >>guests.
>
> Seems to me that might be relevant to whether or not what is served
> is taxable income to the participants, but should be irrelevant as
> to whether or not the contribution funding the function is
> deductible to the donor.

Does anyone ever report things like this as income? If your company
holds a party and serves food, would you try to figure out the value of
the meal so you could report it? Should they include it on your W-2?
What if it's a buffet, so they don't know how much you ate?

Isn't there some kind of "de minimus" rule that lets you ignore things
like this most of the time?

--
Barry Margolin
Arlington, MA

[Jonathan Kamens]

1. This question has been discussed here before:

http://groups.google.com/group/misc.taxes.moderated/browse_thread/thread/9b07932e96c34da4/a5a65a402394cb76?lnk=gst&q=collation#a5a65a402394cb76

2. Here's an interesting wrinkle... Suppose the synagogue
*requires* a family to pay a set fee to sponsor a kiddush when
they are celebrating a life-cycle event at the synagogue on
Sabbath morning. "If members of the synagogue wish to
celebrate their son's bar mitzvah, they are required to
sponsor a kiddush for the entire congregation after services.
The fee for sponsoring the kiddush is $XXX."

In this circumstance, it would seem that the donation is no
longer voluntary but rather is a fee for services rendered; it
is, in affect, a rental fee for the facility for the event.

(This is not theoretical; somebody actually asked me this
question in private email a while back and said that their
synagogue does exactly this.)

Thoughts?

[Barry Margolin]

In article <jt7ptp$4i9$1...@jik3.kamens.brookline.ma.us>,

j...@kamens.us (Jonathan Kamens) wrote:

> 1. This question has been discussed here before:
>
> http://groups.google.com/group/misc.taxes.moderated/browse_thread/thread/9b079
> 32e96c34da4/a5a65a402394cb76?lnk=gst&q=collation#a5a65a402394cb76
>
> 2. Here's an interesting wrinkle... Suppose the synagogue
> *requires* a family to pay a set fee to sponsor a kiddush when
> they are celebrating a life-cycle event at the synagogue on
> Sabbath morning. "If members of the synagogue wish to
> celebrate their son's bar mitzvah, they are required to
> sponsor a kiddush for the entire congregation after services.
> The fee for sponsoring the kiddush is $XXX."
>
> In this circumstance, it would seem that the donation is no
> longer voluntary but rather is a fee for services rendered; it
> is, in affect, a rental fee for the facility for the event.
>
> (This is not theoretical; somebody actually asked me this
> question in private email a while back and said that their
> synagogue does exactly this.)
>
> Thoughts?

Another poster mentioned the possibility that there's may be a required
fee, but you can choose to give more to sponsor a more elaborate
kiddush. The excess would be voluntary, and it seems like that portion
should still be deductible.

--
Barry Margolin
Arlington, MA

[ira smilovitz]

On Friday, July 6, 2012 6:47:23 PM UTC-4, Jonathan Kamens wrote:
> 1. This question has been discussed here before:
>
> http://groups.google.com/group/misc.taxes.moderated/browse_thread/thread/9b07932e96c34da4/a5a65a402394cb76?lnk=gst&q=collation#a5a65a402394cb76
>
> 2. Here's an interesting wrinkle... Suppose the synagogue
> *requires* a family to pay a set fee to sponsor a kiddush when
> they are celebrating a life-cycle event at the synagogue on
> Sabbath morning. "If members of the synagogue wish to
> celebrate their son's bar mitzvah, they are required to
> sponsor a kiddush for the entire congregation after services.
> The fee for sponsoring the kiddush is $XXX."
>
> In this circumstance, it would seem that the donation is no
> longer voluntary but rather is a fee for services rendered; it
> is, in affect, a rental fee for the facility for the event.
>
> (This is not theoretical; somebody actually asked me this
> question in private email a while back and said that their
> synagogue does exactly this.)
>
> Thoughts?

I would argue that it's still deductible. Fees paid to religious institutions in exchange for intangible religious benefits are still deductible. There isn't a requirement that they be voluntary.

Ira Smilovitz

[Dick Adams]

ira smilovitz <ira.sm...@gmail.com> wrote:
> I'm involved in a discussion on a synagogue treasurer's list
> regarding the deductibility of payments to sponsor a kiddush.

> ...

Taxpayer gives $3,000 to synagogue to sponsor a Kiddush.
How is that any different than taxpayer giving $3,000 to
her/his alma mater's general scholarship fund?

Almost everything depends on facts and circumstances.
But based upon Ira's presentation of facts, IMRHO I would
treat it as a charitable deduction.

Dick

[Jonathan Kamens]

ira smilovitz <ira.sm...@gmail.com> writes:
>I would argue that it's still deductible. Fees paid to
>religious institutions in exchange for intangible religious
>benefits are still deductible.

I am not at all convinced that the circumstances here
represent an "intangible religious benefit."

The sponsorship fee paid to the synagogue goes, in large
part, directly to the cost of the extra food required for the
larger kiddush needed for the larger crowd at the bar mitzvah.

An earlier poster suggested that the percentage of those who
partake in the kiddush who are there only for the bar mitzvah
would be small, but in many cases this is not correct. When we
recently celebrated our daughter's bat mitzvah, around half of
the people at services that day were there specifically
because we invited them.

Our congregation was not in a position to be able to provide
the luncheon kiddush we wanted, so we paid an outside caterer
to do it, at a cost of several thousand dollars. This was
clearly a fee for service, not an intangible benefit, and
clearly (in my opinion) was not tax-deductible. If the
synagogue requires a fee paid to the synagogue itself for the
kiddush, it seems to me that this is simply the synagogue
catering the kiddush itself rather than an outside caterer
benefit; again, I don't see this as intangible at all.

It is also worth noting that the fee may cover not only the
kiddush but also the use of the facilities, i.e., the
synagogue, for the celebration of the bar mitzvah. If you rent
a synagogue or church for a wedding, and the fee is paid
directly to the synagogue or church, is that fee
tax-deductible? I think not. The use of the facility seems, to
me, to clearly be a tangible benefit, whether for a wedding or
for a bar mitzvah.

I frankly doubt that the IRS would ever attempt to disqualify
a deduction like this, unless it was a particularly large
deduction and they were already going after the taxpayer for
a pile of other stuff. But just because you can get away with
deducting it doesn't make it a valid deduction.

[ira smilovitz]

On Saturday, July 7, 2012 10:39:51 PM UTC-4, Jonathan Kamens wrote:
> ira smilovitz <ira.sm...@gmail.com> writes:
> >I would argue that it's still deductible. Fees paid to
> >religious institutions in exchange for intangible religious
> >benefits are still deductible.
>
> I am not at all convinced that the circumstances here
> represent an "intangible religious benefit."
>
> The sponsorship fee paid to the synagogue goes, in large
> part, directly to the cost of the extra food required for the
> larger kiddush needed for the larger crowd at the bar mitzvah.
>
> An earlier poster suggested that the percentage of those who
> partake in the kiddush who are there only for the bar mitzvah
> would be small, but in many cases this is not correct. When we
> recently celebrated our daughter's bat mitzvah, around half of
> the people at services that day were there specifically
> because we invited them.

The number of people who are there and how they got there (ie., as invited guests or as regular attendees) is irrelevant. The key point is that the kiddush is open to all who are in attendance.

>
> Our congregation was not in a position to be able to provide
> the luncheon kiddush we wanted, so we paid an outside caterer
> to do it, at a cost of several thousand dollars. This was
> clearly a fee for service, not an intangible benefit, and
> clearly (in my opinion) was not tax-deductible. If the
> synagogue requires a fee paid to the synagogue itself for the
> kiddush, it seems to me that this is simply the synagogue
> catering the kiddush itself rather than an outside caterer
> benefit; again, I don't see this as intangible at all.
>
> It is also worth noting that the fee may cover not only the
> kiddush but also the use of the facilities, i.e., the
> synagogue, for the celebration of the bar mitzvah. If you rent
> a synagogue or church for a wedding, and the fee is paid
> directly to the synagogue or church, is that fee
> tax-deductible? I think not. The use of the facility seems, to
> me, to clearly be a tangible benefit, whether for a wedding or
> for a bar mitzvah.

No, because when you rent the facility for a wedding it is a closed event, only those you invite are permitted to attend. The kiddush is open to all who participate in (attend) the religious service, whether the sponsor has invited them or not.

>
> I frankly doubt that the IRS would ever attempt to disqualify
> a deduction like this, unless it was a particularly large
> deduction and they were already going after the taxpayer for
> a pile of other stuff. But just because you can get away with
> deducting it doesn't make it a valid deduction.

There are many synagogues who state on their websites that sponsored kiddushes are tax-deductible. I would think that there are enough IRS agents who are members of synagogues that if the deductibility were questionable, someone would have made a case of it somewhere. Then, at least, we would have some precedent fall back on.

Ira Smilovitz

[Jonathan Kamens]

ira smilovitz <ira.sm...@gmail.com> writes:
>The number of people who are there and how they got there
>(ie., as invited guests or as regular attendees) is
>irrelevant. The key point is that the kiddush is open to all
>who are in attendance.

Is there some existing IRS guidance, precedent, or regulation
which draws the distinction you are drawing, between an open
and closed event, when determining that a particular deduction
is valid?

>No, because when you rent the facility for a wedding it is a
>closed event, only those you invite are permitted to attend.
>The kiddush is open to all who participate in (attend) the
>religious service, whether the sponsor has invited them or
>not.

In very religious Jewish communities the tradition is in fact
to invite anyone who wants to the wedding celebration,
including in particular poor members of the community. Are you
saying that in such a community, if the wedding was open to
all and catered by the synagogue, the parents would be able to
deduct the entire cost of the affair, often running well into
five figures? I find that hard to believe.

>There are many synagogues who state on their websites that
>sponsored kiddushes are tax-deductible. I would think that
>there are enough IRS agents who are members of synagogues
>that if the deductibility were questionable, someone would
>have made a case of it somewhere. Then, at least, we would
>have some precedent fall back on.

As I noted before, the distinction I am drawing is between
_mandatory_ "donations" to use the synagogue for a particular
event, and _optional_ donations. I don't think there is any
question that the latter are deductible, and that is what
synagogues who say that kiddushes are tax-deductible are
generally referring to. I am, however, doubtful that the
former are deductible.

Note that this question came to me by way of a woman whose
synagogue specifically told her that the fee for her son's bar
mitzvah held at their synagogue was _not_ tax-deductible. As
you point out, the demographics mean that there's a good
chance that there are people on the board with some expertise
in accounting or tax law :-), so I am not inventing my
theory out of thin air.

[Barry Margolin]

In article <jtbvi7$1a9$1...@jik3.kamens.brookline.ma.us>,

The original poster didn't say anything about this being a required fee
for a service they were paying for. The synagogue is presumably going
to hold a kiddish after the Sabbath prayer ceremony, whether or not
there's a bar mitvah and whether or not the families pay for it. The OP
said that the family could voluntarily contribute more, which would
allow the synagogue to host a more elaborate kiddush.

--
Barry Margolin
Arlington, MA

[Jonathan Kamens]

Barry Margolin <bar...@alum.mit.edu> writes:
>The original poster didn't say anything about this being a required fee
>for a service they were paying for. The synagogue is presumably going
>to hold a kiddish after the Sabbath prayer ceremony, whether or not
>there's a bar mitvah and whether or not the families pay for it. The OP
>said that the family could voluntarily contribute more, which would
>allow the synagogue to host a more elaborate kiddush.

I understand that te scenario I am putting forward is not the
same as the original poster's question; you did not need to
quote my entire 47-line posting just to append a 6-line
paragraph at the bottom of it making that point. I agree with
the opinions expressed by others that given the circumstances
posited by the OP, the donation to the synagogue for the
kiddush is deductible.

I am asking about a different scenario, the one I described.
While this scenario is different from that put forward by the
OP, it is still interesting, and as I noted, it is real, not
hypothetical.

I would like to correct your assumption that "The synagogue is
preseumably going to hold a kiddush after the Sabbath prayer
ceremony, whether or not there's a bar mitzvah and whether or
not the families pay for it." While it is true that some
synagogues have a kiddush every week regardless of whether it
is sponsored, many do not. In fact, in some cities the former
is the exception rather than the rule. One of the things that
the synagogue I attend is known for in the community is having
a kiddush every week, because many synagogues in Boston do
not. And a week or so ago, when I attended services at the
Hebrew Institute of Riverdale, a prominent synagogue in New
York City, they had no kiddush, and no one there seemed
surprised by this so I assume it is normal.

[ira smilovitz]

On Sunday, July 8, 2012 8:48:09 AM UTC-4, Jonathan Kamens wrote:
> ira smilovitz <ira.sm...@gmail.com> writes:
> >The number of people who are there and how they got there
> >(ie., as invited guests or as regular attendees) is
> >irrelevant. The key point is that the kiddush is open to all
> >who are in attendance.
>
> Is there some existing IRS guidance, precedent, or regulation
> which draws the distinction you are drawing, between an open
> and closed event, when determining that a particular deduction
> is valid?

Not that I'm aware of. I was drawing the distinction because I think we would all agree that a closed event would not be deductible. It's the open event that generates the differences in opinion.

[remainder snipped for brevity]

Ira Smilovitz

[Salmon Egg]

In article <jt790a$347$1...@dont-email.me>,

JoeTaxpayer <JoeTa...@comcast.net> wrote:

> On 7/6/12 1:22 PM, ira smilovitz wrote:
> > I'm involved in a discussion on a synagogue treasurer's list regarding the
> > deductibility of payments to sponsor a kiddush.
>
> I'm going to bet that the proper paper trail will show the donation to
> be toward the Rabbi's discretionary fund. The treasurer would then
> account for anything else.
>
> I'm thinking this compares to my making a donation to a private high
> school scholarship fund. That would be a deduction. But if I were to pay
> for a particular individual's tuition, probably not.

Because this is a guess. I will guess too. This looks more like
deducting fancy clothes that you wear to work. Cost of uniforms for a
specific job that are not everyday clothes are deductible. You have to
pay taxes on income used to buy clothes for ordinary living. You have to
eat anyway. Buying fancy meals you take for your own sustenance has to
be done anyway.

If you want the deduction give the money to a charity that is one. Have
the synagogue collect non-deductible kiddish meal. You get the benefit
of the meal. The synagogue gets the benefit of not having to pay taxon
its income from the meal.

--

Sam

Conservatives are against Darwinism but for natural selection.
Liberals are for Darwinism but totally against any selection.

[Jonathan Kamens]

Salmon Egg <Salm...@sbcglobal.net> writes:
>Because this is a guess. I will guess too.

I don't think people are guessing so much as attempting to
apply the existing rules framework for what is and is not
deductible to this particular situation.

>This looks more like
>deducting fancy clothes that you wear to work.

I don't think this is a good analogy, since clothes are
generally not deductible, whereas contributions to a house of
worship _are_ generally deductible.

Considering whether something that would normally be
deductible is disqualified for some reason in a particular
case, is very different from considering whether something
that would normally not be deductible is in a particular case.

[Stuart A. Bronstein]

Barry Margolin <bar...@alum.mit.edu> wrote:

> The original poster didn't say anything about this being a
> required fee for a service they were paying for. The synagogue
> is presumably going to hold a kiddish after the Sabbath prayer
> ceremony, whether or not there's a bar mitvah and whether or not
> the families pay for it. The OP said that the family could
> voluntarily contribute more, which would allow the synagogue to
> host a more elaborate kiddush.

For me that's the critical point. If the synagogue is required to do
something particular in exchange for the "contribution," it is
unlikely to be deductible. But if the contribution is something the
synagogue technically can use the money as it sees fit, and it uses
it for its exempt purpose, it is more likely to be deductible.

___
Stu
http://DownToEarthLawyer.com

[Alan]

On 7/6/12 11:22 AM, ira smilovitz wrote:
> I'm involved in a discussion on a synagogue treasurer's list regarding the deductibility of payments to sponsor a kiddush.
>
> Some background for those who aren't Jewish... The end of services on Sabbaths and holidays is marked by a "meal", often referred to as a kiddush. The meal can be as simple as some wine/grape juice and challah (bread) or as elaborate as a multi-course sit-down banquet (but must still contain the wine/grape juice and challah).
>
> Congregants (or others) may donate money to the synagogue to defray the cost of the kiddush or to sponsor it. It is common for people to sponsor a more elaborate kiddush (that is, more than the minimum; not necessarily the blow-out banquet) to commemorate life cycle events/milestones.
>
> The question under debate is whether the donations to sponsor the kiddush are deductible contributions. I say they are because the contribution is directly related to the religious purpose of the synagogue. That is, a kiddush is required and there is no religious limitation on the upside.
>
> Those who say they are not are focused on the meal/personal expense aspect or that you are providing personal benefits to guests.
>
> Any thoughts from the pros here? I've been looking for any relevant citations but haven't found any (and don't expect that the issue has ever been adjudicated).
>
> Ira Smilovitz
>

Okay... I read all the replies. There is, I believe, law on this general
subject. It is in the regs that were published after the law was
changed requiring contemporaneous written acknowledgments. See 1.170A.
There is also two revenue procedures:
http://www.irs.gov/pub/irs-tege/rp_1990-12.pdf and
http://www.irs.gov/pub/irs-tege/rp92_49.pdf

There is revenue ruling 67-246:
http://www.irs.gov/pub/irs-tege/rr_67_246.pdf

In addition, there is a pretty good explanation of the above in IRS Pub
1771. http://www.irs.gov/pub/irs-pdf/p1771.pdf

It seems to me that a sponsorship (the word used by all the jewish
religious organizations I looked at) of a kiddush is part of the
organizations fund raising campaign. As such, the law requires written
acknowledgment from the charity in two cases: Single donations of $250
or more and single donations in excess of $75 when goods and services
are received in exchange for the gift. Most of the sponsorships I looked
at were in excess of $75. For the $250 category, there must be a
statement that no goods and services were provided to the donor or if
there was a quid pro quo, the acknowledgment must provide an estimate of
the FMV of those goods and services. The acknowledgment must be
contemporaneous. (See below for a recent court case on this issue of
"contemporaneous).) The rev. procs. are safe harbors. This means that
you can still get a deduction if you fail the safe harbor as long as the
facts and circumstances surrounding the gift meet the definitions
relating to Sec. 170 of the IRC.

When you read the above, you will discover that we must first determine
whether what we have is a quid quo pro donation (You make the
contribution and get something in return. A good example is the PBS
solicitations in which you get a book or CD.) or whether it falls under
the de minimis rule or is excepted by the rule relating to it being part
of the religious services provided.

The de minimis rule that would relate to a meal would be a FMV that is
the lesser of 2% of the gift or $96 (2010 add inflation). A $150 kiddush
sponsorship would translate to $3 FMV value of the meal if this was a
quid quo pro donation. If this was a quid pro quo donation, the charity
could determine the FMV by determining its typical cost per attendee and
applying a reasonable mark-up to get FMV.

As others have stated, the solicitations for kiddush sponsorships state
that the donation is fully deductible. Every charity has been informed
by the IRS as to the rules for publishing solicitations and what a
written statement must say about it being tax deductible (there are
penalties to the charity). I believe that the organizations state it is
tax deductible because it falls under the religious experience (service)
exemption. In other words, the donation is not a quid quo pro donation.
As such, I am inclined to go along with the organization determination
that it is part of the religious services provided.... until at least
one of the courts says it is not.

The above relates to kiddush sponsorships and not someone holding a
party at the synagogue or temple.

Earlier, I mentioned a court case on the requirement that a written
acknowledgment from a charity be contemporaneous as required by law for
single donations of $250 or more.

See Durden v. Comm'r, TC Memo 2012-140.
http://www.ustaxcourt.gov/InOpHistoric/durdenmemo.TCM.WPD.pdf

What distinguishes this is that the court states that the definition of
contemporaneous is what the law says... no exceptions. Effectively, the
law says you must receive the letter before you file your return. In the
case of the Durdens, the letter they received from the church was timely
but did not include the required statement that no goods and services
had been received by the Durdens (we're talking $25K). The IRS rejected
the deduction because that phrase was missing. The Durdens asked the
church for another letter that included the missing words. This was done
more than a year after they filed. The court rejected that letter as not
being contemporaneous. The court also upheld the IRS because the
original letter did not include the goods and services clause. This is
a heads up to all tax pros.





--
Alan
http://taxtopics.net

[JoeTaxpayer]

On 7/9/12 1:14 PM, Stuart A. Bronstein wrote:
> Barry Margolin <bar...@alum.mit.edu> wrote:
>
>> The original poster didn't say anything about this being a
>> required fee for a service they were paying for. The synagogue
>> is presumably going to hold a kiddish after the Sabbath prayer
>> ceremony, whether or not there's a bar mitvah and whether or not
>> the families pay for it. The OP said that the family could
>> voluntarily contribute more, which would allow the synagogue to
>> host a more elaborate kiddush.
>
> For me that's the critical point. If the synagogue is required to do
> something particular in exchange for the "contribution," it is
> unlikely to be deductible. But if the contribution is something the
> synagogue technically can use the money as it sees fit, and it uses
> it for its exempt purpose, it is more likely to be deductible.

This was the distinction I was trying to make by having the donation go
through the general fund.

To Jon's point, these functions can be as simple as $100 or so for
minimal food/drink, a few hundred when a better spread is added, and in
the thousands if catered as for a function.

I agree with Jon, the multi-thousand catered function probably doesn't
pass scrutiny.

[removeps-groups]

"Barry Margolin" <bar...@alum.mit.edu> wrote in message
news:barmar-7A2910....@news.eternal-september.org...

> Does anyone ever report things like this as income? If your company
> holds a party and serves food, would you try to figure out the value of
> the meal so you could report it? Should they include it on your W-2?
> What if it's a buffet, so they don't know how much you ate?
>
> Isn't there some kind of "de minimus" rule that lets you ignore things
> like this most of the time?

In my thinking it's a fringe benefit, I think section 125 or 132.

[Confused]

On Friday, July 6, 2012 1:22:35 PM UTC-4, ira smilovitz wrote:
> I&#39;m involved in a discussion on a synagogue treasurer&#39;s list regarding the deductibility of payments to sponsor a kiddush.
>
> Some background for those who aren&#39;t Jewish... The end of services on Sabbaths and holidays is marked by a &quot;meal&quot;, often referred to as a kiddush. The meal can be as simple as some wine/grape juice and challah (bread) or as elaborate as a multi-course sit-down banquet (but must still contain the wine/grape juice and challah).

>
> Congregants (or others) may donate money to the synagogue to defray the cost of the kiddush or to sponsor it. It is common for people to sponsor a more elaborate kiddush (that is, more than the minimum; not necessarily the blow-out banquet) to commemorate life cycle events/milestones.
>
> The question under debate is whether the donations to sponsor the kiddush are deductible contributions. I say they are because the contribution is directly related to the religious purpose of the synagogue. That is, a kiddush is required and there is no religious limitation on the upside.
>
> Those who say they are not are focused on the meal/personal expense aspect or that you are providing personal benefits to guests.
>

I see it completely differently.
In many (most?) cases you are obligated to host a kiddush to be allowed to have a bar mitzvah or wedding. It is a payment for a service and should not be tax deductible; any more than the cloths you buy to wear to the event are.
If you host it because you want to and receive nothing in return it should be tax deductible.
Now... "should" has no tax relevance. But it should.