Open Forum

We will be opening the doors of the Missoula Insectarium this spring and are offering memberships that have benefits such as free membership for x individuals (x depends on the membership level), and reduced prices on programs and special events. The tax rules are confusing to me and our accountant hasn't been able to clarify. The rules make it sound like memberships for $75 and less are tax deductible with these types of benefits, but above $75 they are not? Can anyone provide clarification in how your institution handles this?
Thank you!
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Jen Marangelo, Executive Director
Missoula Butterfly House and Insectarium
Missoula MT
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Ms.  Marangelo,

The $75 threshold relates to disclosures your Museum must make to the perspective member, not deductibility.  Any funds the member/donor provides over the value of goods and services received is deductible.  If the membership fee is $75 or less and the benefits are free admissions and discounts in a gift shop, etc, or low cost items such a coffee mug, then your organization has no obligation to report any value of these benefits.  If a membership level at say, $200, provided the free general admission, plus admission to a members only tour with a feature lecturer and refreshments, then you would need to disclose your good faith estimate of the value of the additional special event.  The donor would get a deduction for the amount of the membership less, the value of items received.  We have seen organization offer a checkbox in on their solicitations where the member/donor can decline any special benefits and this allows them to take the full amount as a deduction.  Hope this helps.  This is another case where the tax law is a bit confusing and burdensome.

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Phillip Berry
Partner
Charlottesville VA
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Phillip, 

Does the membership deductible for the consumer still apply if the membership fee goes directly to a government (in our case State of SC) owned museum rather than their parallel 501 supporting Foundation?

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William Calloway
Executive Director
South Carolina State Museum
Columbia SC
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Original Message:
Sent: 01-30-2015 08:51 AM
From: Phillip Berry
Subject: Memberships and tax deductibility

Ms.  Marangelo,

The $75 threshold relates to disclosures your Museum must make to the perspective member, not deductibility.  Any funds the member/donor provides over the value of goods and services received is deductible.  If the membership fee is $75 or less and the benefits are free admissions and discounts in a gift shop, etc, or low cost items such a coffee mug, then your organization has no obligation to report any value of these benefits.  If a membership level at say, $200, provided the free general admission, plus admission to a members only tour with a feature lecturer and refreshments, then you would need to disclose your good faith estimate of the value of the additional special event.  The donor would get a deduction for the amount of the membership less, the value of items received.  We have seen organization offer a checkbox in on their solicitations where the member/donor can decline any special benefits and this allows them to take the full amount as a deduction.  Hope this helps.  This is another case where the tax law is a bit confusing and burdensome.

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Phillip Berry
Partner
Charlottesville VA
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