Tax Question for Class?

Question

I have a question for a tax class that i can't seem to find an answer to, can someone help me wit this.

Say i were to put up a 100,000$ reward for information leading the the arrest and conviction of a murderer, lets just say who killed a family member. Someone gives information and the murderer is convicted. I contribute the money to the police department, who then pays the informant. Is the 100,000$ considered an itemized deduction for me?

Just to clairfy, i am gifting the money to the police department... they are the ones giving it to the informant

Answer 1

Those who say the police department is not a charitable organization are correct. However, a tax deduction is also available for donations to a governmental unit. So a donation to a PD is, potentially, deductible.

I think the gift would have to be no-strings-attached and not directly linked to a conviction. Then, as someone else said, it is the discharge of a PD obligation. Others have mentioned the restrictions on AGI, which may dent your tax deduction.

Answer 2

In general, you can claim a charitable deduction for contributions to government agencies. The issue here is whether the transfer to the police department was a contribution or whether they would be viewed as a mere conduit to fund your otherwise non-deductible obligation. Class answer, the hypothetical reward poster screwed up and should have told the police to offer the reward and placed the money in an escrow where the police could take it when the killer is convicted. The contribution would then be to fund the obligation of the police department.

Answer 3

YES it is deductible. You will need a receipt from the Police Department, but they are considered a Non-Profit Org. However, you are only allowed to claim up to 75% of your agi as deductible.

Answer 4

To my knowledge, the police department itself is a government entity - NOT a 501c3 or qualifyting organization.
Donating to a 501c3 (not-for-profit) or qualifying organization would constitute a tax deductible contribution.

If this came up on someone's tax return that I was doing, I would go with caution and advise them against trying to claim this as a charitible contribution.

Answer 5

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Answer 6

No. The money did not go to the pOlice it went to a person who is not registered as a non-profit or tax exempt organization.

Your money is a GIFT. LifeTime Gift Rules apply only to family, so this cannot be considered a tax deduction of any kind.

Answer 7

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Answer 8

Yes you would need a receipt from the nonprofit organization the city or county police would have set up for that type of donation

Answer 9

You may claim it on your taxes as an itemized deduction, The people who claim the money will be responsible for all the wit-holdings that the government will want, approximately 45%.

Answer 10

No. You are not giving a charitable deduction and the police department is not a charitable organization.