December 17, 2018

Charitable Giving to Your Alma Mater

As the year ends, with the Christmas spirit in the air, many people make charitable contributions to their favorite organizations. For their Houston alumni, that may be to the University of Houston, Rice, Texas A&M, UT or another fine college. Giving to your alma mater is a great way to give back.

From a tax planning perspective, these charitable contributions are now even more important. This is due to the limitations and disallowed deductions that tax reform introduced. In fact, making charitable contributions may now be the best way to increase your deductions before the year ends. Just remember that tax planning can be complicated, and you will probably want to consult your tax advisor.

Tax reform made significant changes to charitable contributions. For example, if you previously wanted to make a charitable contribution to your alma mater in exchange for the right to purchase tickets to an athletic event, your charitable contribution deduction would equal 80% of the amount you paid (contributed). However, tax reform changed that.

The Tax Cuts and Jobs Act disallowed deductions for charitable contributions to a college or university in exchange for the right to purchase tickets or seating at an athletic event. Fortunately for their supporters, many Universities now offer a workaround through a point system as compensation for charitable contributions.

You can see one example through the link below for how the University of Houston tries to work around this change.

This a wonderful example of American ingenuity and the ingenious programs of university fundraisers. During this holiday season, giving to your alma mater is still a great way to give back to an institution that helped you get where you are today. Of course, some assembly (planning) is required. #uh #GoCoogs