Jitasa Nonprofit Blog

Support Center Question of the Week: Fair Market Value

The Question

My organization is in the planning stages of an upcoming golf event. We are trying to determine the fair market value per person for the event and what amount would be tax deductible for the attendees.

The Answer

When determining the fair market value (FMV) you must include the “value of benefits received.” Most organizations include the costs of food, beverage, facility rental costs, and any other item the patron may receive (like a gift/goody bag). Even if items are donated you will still include those costs.

Once you have determined your FMV and what you will charge patrons to attend you will have the contribution/tax deductible amount.

For example, let’s say that your FMV for your event is $45 and you decide to charge $75 for a ticket. The contribution/tax deductible amount would be $35 ($75-$45). Be sure and include the retail value on the ticket. A statement could read “the retail value of this event is $45. Any amount paid above $45 is considered a charitable contribution; consult your tax adviser on your yearend tax deductions. 

For more information, read our blog "Special Events: How They Affect Your Accounting & Your Donors."

Marci Cozby, Support Center Associate for Jitasa

Do you have a nonprofit accounting question related to this blog post? Email your question to wecanhelp@jitasa.is, and have it answered by one of our nonprofit accounting specialist!

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