Recently I’ve been hearing on the radio ads suggesting listeners to be unique/special and instead of giving a plain old boring gift this year, to donate in the name of the gift recipient. Personally I think it’s one of the worse presents ever. If you’re going to donate, donate because you want to. Don’t donate because you feel like you’re doing the recipient something special.
I brought this up over dinner and asked who gets to actually write it off? Assume Robert donated $100 to charity in John’s name. Technically that donation is tax deductible, but who gets to write it off their income while filing for taxes? Robert because it was really his donation? or John because Robert donated in John’s name?
Chad brought up an interesting point and that is that technically if John was to write it off, he would have to claim he received $100 from John (as income) and donated it (as tax-deductible expense), making it a net zero change. $100 probably isn’t enough that you need to report it, but let’s assume someone donated $10,000 in your name. Now not only is it a horrible present, but you probably have to report it on your tax return given the amount. In other words, you were given work to do as your gift.
As always, it’s Christmas time and it’s the time to help out the less fortunate. You should definitely check out the The Humble Indie Bundle #2 where you can donate any amount and get 5 free PC games!