Quid Pro Quo Contribution


DEFINITION of 'Quid Pro Quo Contribution '

A charitable donation for which the donor receives something from the recipient in exchange. A quid pro quo contribution has different rules for federal income tax deductibility than a regular charitable contribution, for which the donor receives nothing from the charity in return. The IRS considers as tax deductible only the amount of the contribution in excess of the value of the good or service the charity gave the donor.

BREAKING DOWN 'Quid Pro Quo Contribution '

During her favorite public radio station’s local pledge drive, Ann donates $150. As a thank you from the radio station, she receives a gift certificate for a cooking class that would normally cost $70. (The public radio station is able to offer such a generous premium because a sponsor donated it.) Ann’s contribution is considered a quid pro quo contribution because she receives something in exchange for her donation.

Since Ann donated more than $75, the Internal Revenue Service requires the public radio station to send her a letter stating that the amount of Ann’s $150 contribution that is deductible on her federal income tax return is limited to $80 – the amount of her contribution minus the $70 fair market value of the cooking-class gift certificate she received.

  1. Tax Deductible Interest

    A borrowing expense that a taxpayer can claim on a federal or ...
  2. Proof of Charitable Contributions

    Substantiation required by the Internal Revenue Service for a ...
  3. Readvanceable Mortgage

    A mortgage feature that allows the borrower to re-borrow the ...
  4. The Smith Maneuver

    A strategy that makes interest on a residential mortgage tax-deductible ...
  5. Charitable Contributions Deduction

    One of the itemized deductions available for taxpayers who donate ...
  6. Form 4684: Casualties And Thefts

    A tax form distributed by the Internal Revenue Service (IRS) ...
Related Articles
  1. Personal Finance

    Don't Judge A Charity Based On Administrative Costs

    It is unwise to base charitable giving on administrative costs.
  2. Entrepreneurship

    How To Start A Charity

    Here's a detailed guide that provides the steps needed to start a charity.
  3. Retirement

    Gifting Your Retirement Assets To Charity

    There are several things to consider when it comes to this type of charitable giving. Make sure you're well informed.
  4. Personal Finance

    Charity CEOs: Are They Being Paid Too Much?

    Deciding how much charities should spend on the salaries of their CEOs is more difficult than you may think.
  5. Personal Finance

    Is The Billionaire Charity Pledge A Good Idea?

    Will Bill Gates' call for billionaires to become more active in charitable giving do all the good it could?
  6. Taxes

    Give To Charity; Slash Your Tax Payment

    Being generous has never been more (financially) rewarding!
  7. Taxes

    How To Spot Dubious Haiti Charity Pleas

    Make sure your dollars get to the earthquake victims, not the scamsters.
  8. Taxes

    Retired? 7 Tips for Cutting Taxes Before 2015 Ends

    As 2015 nears its end, here are some financial moves retirees can make before December 31 that can help to lower your tax bill.
  9. Taxes

    Tax Breaks For Volunteering

    Your volunteer ventures could earn you some welcome tax deductions, along with the satisfaction of helping others.
  10. Taxes

    Six Ways Your Tax Preparer Knows You’re Lying

    Cheating on your taxes is asking for trouble. You might get away with it, but you’re playing with fire and likely to get burned.
  1. Can I donate stock to charity?

    Giving stock, instead of cash, as a donation can greatly benefit both parties. You will find that most charities, hospitals, ... Read Full Answer >>
  2. Is dental insurance tax deductible?

    Dental insurance premiums may be tax deductible. To be deductible as a qualifying medical expense, the dental insurance must ... Read Full Answer >>
  3. Are personal loans tax deductible?

    Interest paid on personal loans is not tax deductible. If you take out a loan to buy a car for personal use or to cover other ... Read Full Answer >>
  4. Are Flexible Spending Account (FSA) contributions tax deductible?

    The contributions you make to your Flexible Spending Account (FSA) are not tax-deductible because the accounts are funded ... Read Full Answer >>
  5. Do Flexible Spending Accounts (FSAs) expire?

    Flexible Spending Accounts (FSAs) do expire and are considered to be a "use it or lose it" type of plan. They are savings ... Read Full Answer >>
  6. Do 401k contributions reduce AGI and/or MAGI?

    Traditional 401(k) contributions effectively reduce both adjusted gross income (AGI) and modified adjusted gross income (MAGI). ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center