Discussion:Private School Tuition - Case for tax deduction?
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Discussion Forum Index --> Tax Questions --> Private School Tuition - Case for tax deduction?
| 1 December 2010 | |
| I have a client who's kid is attending secondary private Catholic school. The child decided to not attend that school and to attend another private school. The first school's tuition was $15,000, but because it was past the deadline, only half that amount could be refunded. So the client is out $7,500. The child withdrew from the school before the first day of classes.
Question: Can my client deduct the unrefunded $7,500 for charitable deduction purposes, since their child did not get any benefit for it? Or will it be denied because the original intent was to fund the child's tuition, which clearly did not happen? The school will not issue any type of document to indicate a deduction. I've tried to search all over to see if there's an exception to this, but unable to. Anyone with an idea will be greatly appreciated. | |
| 1 December 2010 | |
| Discussion:Charitable Deduction or Non-business bad debt | |
| 1 December 2010 | |
| Where I come from, once I spend $15,000 for my child to attend a particular school, said child is no longer free to choose to attend another school. | |
| 1 December 2010 | |
| Thanks Trillium, I did not see that discussion before. AEM - yeah true. I think my client was on the verge of "extincting" the child for that decision, but then they would've lost the dependency deduction - lol! | |
Tax Writer (talk|edits) said: | 1 December 2010 |
| The Catholic school really won't give them a receipt? Considering you know the whole story behind the drama leading up to this "donation," I personally wouldn't take a deduction this large without some indication that it was a charitable gift.
I also agree with AEM CPA-- but you know how teenagers are. | |
Actionbsns (talk|edits) said: | 1 December 2010 |
| I also agree with AEM, it's a parent's job to be the bad guy especially where teenagers are concerned. It's the teenager's job to hate the parent for his/her decisions and grow up into a responsible adult and forgive the parent his/her "transgressions".
I don't see how there can be a charitable deduction there either. If the school isn't going to document the balance of the tuition as a donation, then no donation exists. | |
Death&Taxes (talk|edits) said: | 1 December 2010 |
| JDuganCPA in the referenced discussion: "To make a charitable contribution, there must be donative intent. It does not appear that donative intent can be shown."
I wonder what the answer would be if the school refunded $7,500 on the understanding that the parents would donate $7,000 back to them? I am more curious not in the answer but in the responses given here. I know what I think. | |
| 1 December 2010 | |
| In answer to Dave's question, assuming that the refund and subsequent donation actually happened, I would sign that return. A backroom agreement wouldn't change the fact that, once the parents received the refund, it was still their free choice to donate the money back to the school. What is the school going to do, sue because the parents didn't make a donation to the school? The school, for their part, is freely deciding to grant the refund despite their contractual right to keep the money. At the end of the day, it's an act of good faith on both sides, and I think it would pass legal scrutiny. | |
| 1 December 2010 | |
| I presume the parents signed a matriculation contract with the school (with the withdrawal penalties stipulated). They then breached the contract and paid the consequences thereof. The parents had the benefit of having a school seat reserved for their fickle pupil and left the school in the lurch in trying to refill it. Us remaining tax payers should not have to pick up the tab on this. | |
| December 1, 2010 | |
| "benefit of having a school seat reserved for their fickle pupil and left the school in the lurch in trying to refill it." Yes, this is what is received when tuition is paid, even if no classes are taken.
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| 2 December 2010 | |
| Did the kid just switch schools, or did she switch religions also?
If she can qualify as a consciensious objector (because of relgious convictions) then the government will let her do what she wants. She got up to the school and had a religious conversion and she quit. God called her in another direction. You have to prove that the girl quit for religous reasons. Like to become Jewish or a Quaker for example. She had a change of heart and demanded her money back, she nailed a letter on the front door of the church school with 75 complaints she had about the church. The church would not give her her money back, and out of the goodness of her heart, she gave it to the school for relgious purposes (like a sprinkler system for mass baptisms). The critical issue is that the girl disclaims the contract. She declares it void due to an "Act of God". This is the act of God converting the child. The church cannot and will not argue against God, and hence it must be declared a charitable deduction. | |
Actionbsns (talk|edits) said: | 2 December 2010 |
| Crow I think you have this kid mixed up with Martin Luther. | |
| 2 December 2010 | |
| Action, in the legal game, we call that "precedent". Luckily the girl quit a Catholic School, so the case is directly on point. | |
| 2 December 2010 | |
| One hurdle that you are going to have to get over is Reg. 1.170A-1(b). This has to do with a charitable contribution is made when deliver occurs.
When the check was written for "tuition", I don't see a connection with unconditional delivery. | |
| 2 December 2010 | |
| I think they might be up the creek. Well, perhaps she'll get along well at the new school. Your client's daughter is certainly a firebrand and could end up being a Joan d' Arc type figure.
It's too bad she can't find a short person (so called "half pint") to take her place at the original school. Maybe they could help a legal immigrant with stunted growth (history of rickets or something). Surely the school would accept the petit substitute child at the half price already paid instead of just keeping the $7,500 and letting the teaching go to waste. In this way you will have made one and a half parties exceedingly happy. | |
Anytaxpayer (talk|edits) said: | December 3, 2010 |
| Seems as though the parents are learning a tough lesson. Either they should have communicated with junior a bit more about educational opportunities or made junior pay the difference. Now that would have been an education. | |
Southparkcpa (talk|edits) said: | 3 December 2010 |
| Reminds me of the 80's when most "good catholics" deducted their tuition becaus the checks were made payable to the church even though it was for tuition.
Why does anyone think the IRS made a receipt letter a requirement. Sounds like this kid is gonna cost them a lot more in the years to come with this behaviour. | |
Harry Boscoe (talk|edits) said: | 5 December 2010 |
| D'you think there's a "study" of the number of large tax deductions claimed for checks paid annually (or per semester, I guess) to Catholic institutions before and after the "receipt letter" requirement? I'm shocked, just shocked.
And I'm pretty sure it was Congress and not IRS that created this requirement. | |
Death&Taxes (talk|edits) said: | 5 December 2010 |
| Right-o Harry, Congress did the deed. We could have two scales. One would measure these missing charitable deductions while the second would pile the dogs lost to the SSN requirement. | |
Harry Boscoe (talk|edits) said: | 5 December 2010 |
| Where's Fr. Muckleclucker on this *church* issue?
(As a parenthetical aside, please note that *Congress* can't decide how to spell "acknowledgment/acknowledgement" in Section 170(f)(8)... That's really really really bad. Pretty soon we'll accept "forego" instead of "forgo". I have given up on "there/their/they're".) (And don't miss the OP's opening: "I have a client who's kid is attending..." He started it!!) | |
Fr. Mackelhenry (talk|edits) said: | 5 December 2010 |
| I don't comment on church affairs. Besides, I've been too busy trying to learn this tongue twister they call the new Mass. | |
Fr. Mackelhenry (talk|edits) said: | 6 December 2010 |
| Thanks Harry for correcting that. The Holy Spirit had a hold of my tongue and I misspelled it. I'm speaking in tongues tonight I'm so Spirit filled. | |
