Quid Pro Quo Contribution

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Proof of Charitable Contributions ...

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

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

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

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

    A tax form distributed by the Internal Revenue Service (IRS) ...
  6. Charitable Gift Life Insurance

    A method of contributing to charity by taking out life insurance ...
Related Articles
  1. Can I donate stock to charity?
    Investing

    Can I donate stock to charity?

  2. Don't Judge A Charity Based On Administrative ...
    Personal Finance

    Don't Judge A Charity Based On Administrative ...

  3. How To Start A Charity
    Entrepreneurship

    How To Start A Charity

  4. Gifting Your Retirement Assets To Charity
    Retirement

    Gifting Your Retirement Assets To Charity

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center