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  1. #1
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    Mar 2015
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    Default Making a Charitable Contribution That is Reimbursed to Cover Expenses

    I think I know the answer to this, but I'd like some assurance on my interpretation.

    I recently assumed a position as treasurer of my church. In 2015 a gentleman went on a missions trip and paid 3k out of pocket (airfare, vaccinations, visa, etc).

    After getting back home from the trip he wrote a check to the church for the amount of his expenses and wrote in the memo (China trip). He was reimbursed by the past treasurer for the full amount and his statement for the year called this a charitable contribution.

    This is not allowable, correct?

    Anything reimbursed isn't allow because it wasn't given directly to the church? Or am I wrong on that?

    Ideally he should have given the money to the church and the church pay for the expenses?

  2. #2
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    Oct 2014
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    Had he simply paid out of pocket the $3,000 for the mission he might have deducted that as a charitable contribution on his 2015 return. But the church reimbursed that money so he cannot deduct that. He then wrote a check to the church for same amount and wrote on the check that it was for the China trip. It is not clear that he actually restricted the use of the funds to pay for that. In the end, he likely can deduct the $3,000 amount of the trip once; he cannot double dip here and deduct $6,000 because all he really expended here was $3,000.

  3. #3
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    Mar 2015
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    To clarify:

    The gentleman paid $3k for the trip (personally), then paid $3k to church, which was reimbursed. So the church only paid $3k total. He's only trying to claim 3k. The second $3k was a wash and not deductible because it was reimbursed.

    Are all reimbursed expenses not eligible to be charitable? Also my take on the first 3k was that because it wasn't given to a charitable organization it isn't deductible? Or is that okay?

  4. #4
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    Mar 2013
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    18,340

    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    Quote Quoting speedy
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    This is not allowable, correct?
    What's not allowable?

    The transactions are certainly "allowable."

    The bigger question is what is he going to deduct on his 2015 tax return?

    Has he said?

  5. #5
    Join Date
    Jan 2006
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    First, why do you care? If he takes a charitable deduction that isn't allowed, it's his problem. It doesn't affect the church.

    but I think I know why all the goofy stuff
    My guess anyway;
    the reimbursement was for the trip expenses. The $3000 was so he could take an actual $3000 charitable deduction. From what taxing matters said he didn't have to do that. He could have taken the $3000 trip expenses as a charitable deduction because it was for the church, the missionary activity.

    So he he never had to donate $3000 to get the $3000 deduction.

    What they need to be cautious of is doing things like this. While it doesn't appear there was any ill intent, when people start seeing things like this not understanding what is happening, well, tongues may begin to wag. For as Holy as church goers want everybody to believe, it seems they have been the home to more gossip than anyplace else I've seen.

  6. #6
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    Mar 2015
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    my concern is the statement from the church saying what he paid, and was reimbursed was actually not charitable. He basically gave money and was reimbursed so he'd get a statement saying the first 3,000 was charitable. As you said.

    I don't care what he puts down...just want to make sure it's done correctly going forward.

    He didn't go on behalf of the church. He wanted to go so he did research and basically did it himself. I don't believe the organization was based in the U.S. but I don't know the details of that.

  7. #7
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    Jan 2006
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    so you are saying your church had nothing to so with the mission? If not, then there is a problem with what happened. I think it's called tax fraud.

  8. #8
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    Mar 2015
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    I got a brief overview from the previous treasurer but I don't believe so. All I know is what I detailed above... The church was in support of him going but he basically sought out the opportunity himself. There was another organization he connected with but I don't know the details of what happened there.

  9. #9
    Join Date
    Oct 2014
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    Quote Quoting speedy
    View Post

    He didn't go on behalf of the church. He wanted to go so he did research and basically did it himself. I don't believe the organization was based in the U.S. but I don't know the details of that.
    If he didn’t go as part of the work of the church (or any other charitable organization) then he has a problem. The expenses he paid for that trip are then personal expenses that would not have been deductible. If he then made the contribution to the church with the understanding that the church would use that money to reimburse himself for that trip then that contribution to the church is also not deductible. The money was not being used to fund the religious/charitable work of the church but instead he was using the church as a conduit to reimburse himself. In short he was trying to use the check to the church to try to transform the money he paid for a personal trip into a tax deductible expense. So it is critical here whether the primary reason for this trip and the expenses he incurred were to assist the church it its tax exempt activities or not. If not, I think none of it is deductible.

  10. #10
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    Default Re: Making a Charitable Contribution That is Reimbursed to Cover Expenses

    Quote Quoting Taxing Matters
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    If he didn’t go as part of the work of the church (or any other charitable organization) then he has a problem. The expenses he paid for that trip are then personal expenses that would not have been deductible. If he then made the contribution to the church with the understanding that the church would use that money to reimburse himself for that trip then that contribution to the church is also not deductible. The money was not being used to fund the religious/charitable work of the church but instead he was using the church as a conduit to reimburse himself. In short he was trying to use the check to the church to try to transform the money he paid for a personal trip into a tax deductible expense. So it is critical here whether the primary reason for this trip and the expenses he incurred were to assist the church it its tax exempt activities or not. If not, I think none of it is deductible.
    The original expenses might still be deductible if the other organization he worked through was a legitimate charitable organization. I hesitate to assume that it was not a legitimate mission trip.

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