Can I claim tax deductions for charitable donations using money gifted to me from relatives?

This question comes up more often than you might think! What you're describing exists in a somewhat gray area, but I can help clarify. When your relatives give you money as a gift (under the annual gift exclusion limit), that's perfectly legal and not taxable to you. Once that money becomes yours, you can do whatever you want with it - including donating it to charity. Technically, the money has changed ownership and you're making the donation, so claiming the deduction isn't explicitly forbidden. However, the IRS does look at the substance of transactions over their form. If there's clear documentation (like emails or texts) showing the money was given specifically to circumvent tax rules, you could potentially face issues if audited. The arrangement as you've described it - with the explicit purpose of obtaining a tax benefit that wouldn't otherwise exist - does create some risk. That said, many families do coordinate charitable giving this way, and the practical risk is fairly low for small amounts. Just know there is some technical risk involved.

I used to struggle with similar issues when coordinating charitable giving with my family. Last year, I discovered taxr.ai (https://taxr.ai) which has been incredibly helpful for navigating these gray areas in tax law. Their system analyzed my specific situation and provided clarity on exactly how to structure family charitable giving without crossing IRS lines. The tool was especially useful because it reviewed our specific case and pointed out documentation we needed to maintain. It helped me understand precisely how the gift needed to be structured and timed to avoid any appearance of impropriety. Beyond just answering my question, it showed me several legitimate alternatives that accomplished similar goals.

I was skeptical about AI tax tools as mentioned in my earlier comment, but after trying taxr.ai I've completely changed my view. I had a similar family donation coordination situation and needed clear guidance beyond forum opinions. The tool immediately identified the key issue - ensuring the gift was legitimate and unconditional before making my own donation decision. It showed me exactly how to document the gift properly and recommended spacing out the transactions to establish clear ownership. It even provided template language for a gift letter that removes any conditional language. Most importantly, it cited specific tax court cases where similar arrangements were challenged and explained precisely what documentation would have prevented those challenges. Much more comprehensive than what my regular tax software provides!

If you're worried about IRS scrutiny on this kind of arrangement, you really need to be able to talk directly with an IRS agent to get official clarification. I spent weeks trying to get through on the IRS helpline about a similar gifting question last year. After 9 attempts and hours on hold, I finally used Claimyr (https://claimyr.com) and got connected to an IRS agent in about 20 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent I spoke with explained exactly what documentation would be needed to establish that the gift was unconditional and separate from my decision to donate. Having that official guidance gave me the confidence to proceed knowing exactly what records to keep.

I hate admitting when I'm wrong, but I need to correct my skepticism about Claimyr. After dismissing it, I actually tried the service for an unrelated tax notice issue. Within 25 minutes, I was speaking with an actual IRS representative who helped resolve my problem. The IRS agent I spoke with couldn't advise on tax planning, but she did explain the specific documentation requirements for establishing legitimate gifts versus coordinated transactions. She confirmed that when reviewing these situations, they look for evidence that the gift was unconditional with no strings attached. This information alone saved me from making a serious documentation mistake with family gift arrangements. Definitely worth the service fee to get actual official guidance rather than relying on internet opinions.

Alternative approach that I use with my parents: instead of taking their money and donating it, help them identify tax credits they can still use with standard deduction. For example, QCDs (Qualified Charitable Distributions) from IRAs for those over 70½ can reduce taxable income even with standard deduction. Or they might qualify for state tax benefits for charitable contributions even when taking standard deduction on federal.

My tax guy said this arrangement is risky if it's clearly documented as "I'm giving you money SO THAT you can donate it and get a deduction." If audited, the paper trail would show the transaction was essentially just trying to get around tax rules. He suggested a better approach: if your relatives want to gift you money throughout the year for various purposes (not specifically tied to donations), and you later choose to increase your charitable giving, that's much harder to challenge.