As you prepare your 2007 tax return, you should consider the IRS guidelines set forth below. If you are entitled to receive a benefit as a result of making a contribution to a qualified organization, you can deduct only the amount of your contribution that is more than the value of the benefit you are entitled to receive.
Cougar Club Tax Disclosure Statement
If your contribution to the Cougar Club exceeds $75 and entitles you to receive benefits in return, IRS regulations require the Cougar Club to provide you with the following written disclosure statement:
The amount of your contribution that is deductible for federal income tax purposes is limited to the excess of money (or the fair market value of contributions other than money) you contribute to the Cougar Club over and above the value of goods or services made available to you by the Cougar Club in connection with your contribution. In exchange for your contribution, you may have received, or been entitled to receive, one or more of the following benefits, which have the following estimated fair market values:
- Membership plaque (one time only), $12
- Cougar bronze desk memento (one time only), $150
- Media guides for football and basketball, $8 each
- Free club luncheons, $5 per person, per luncheon (7 luncheons in 2007)
- Hall of Fame Banquet (Silver level and above), $20 per meal
- Annual Legacy Dinner (Legacy members only), $25 per meal
- Y Awards Pre-Reception (Legacy members only), $5 per person
In computing your deduction for charitable contributions to the Cougar Club, you should subtract the value of any benefits you received, or had the right to receive, according to the benefits schedule set forth above, from the total amount you contributed. In addition, the IRS has provided the following statement and examples with regard to the right to buy tickets to athletic events:
"Athletic events. If you make a payment to, or for the benefit of, a college or university and, as a result, you receive the right to buy tickets to an athletic event in the athletic stadium of the college or university, you can deduct 80% of the payment as a charitable contribution.
"If any part of your payment is for tickets (rather than the right to buy tickets), that part is not deductible. In that case, subtract the price of the tickets from your payment. 80% of the remaining amount is a charitable contribution.
"Example 1. You pay $300 a year for membership in an athletic scholarship program maintained by a university (a qualified organization). The only benefit of membership is that you have the right to buy one season ticket for a seat in a designated area of the stadium at the university's home football games. You can deduct $240 (80% of $300) as a charitable contribution.
"Example 2. The facts are the same as in Example 1 except that your $300 payment included the purchase of one season ticket for the stated ticket price of $120. You must subtract the usual price of a ticket ($120) from your $300 payment. The result is $180. Your deductible charitable contribution is $144 (80% of $180)." (Taken from IRS Publication 526 Charitable Contributions--revised December 2005--page 4).
As you know, Cougar Club members must make a contribution to BYU Athletics in order to be eligible to purchase tickets in the club's priority seating areas of LaVell Edwards Stadium and the Marriott Center. Based on the IRS guideline quoted above, the Cougar Club advises you that only 80% of the portion of your contribution which entitles you to purchase priority seating is tax-deductible (subject to any other applicable limitations). A contribution of $100 entitles a donor to seating in most priority seating areas in LaVell Edwards Stadium and the Marriott Center. Donors who purchased East Club Chair (section 33B or 35A) or East Legacy Chair (section 34) seats for football, who purchased Courtside basketball seats, or who leased a loge at LaVell Edwards Stadium will receive a separate letter with additional information.
For additional information on the value of Cougar Club benefits, please contact the Cougar Club Office at 801-422-2583 or 1-800-426-4298. All Club Members are encouraged to consult with their tax advisors.