Claiming Raffle Basket Donation as Tax Deduction

Hey tax folks, I need some advice on whether I can claim a tax deduction for a raffle basket I donated. My daughter's school was having their annual fundraiser and I put together a pretty nice gift basket with items from my small business (I sell handmade jewelry). The total retail value was around $275. I kept all my receipts for the items purchased specifically for this donation. The school gave me a donation letter, but I'm not sure if this qualifies as a charitable contribution since it's technically for a raffle. Does anyone know how I should handle this on my taxes? Should I list it as a business expense since I used some of my inventory items, or is it better as a personal charitable donation? I've never done this before and don't want to mess up my filing for 2024.

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18 comments

Christopher Morgan

•8M

This is actually a pretty common question! For charitable donations of items to qualified organizations like schools, you can generally claim a deduction. However, there are some important distinctions here. Since you're using items from your small business, you should treat this as a business expense rather than a personal charitable contribution. The deduction would be for the cost of the items to you, not their retail value. So if those items cost you $120 to make (materials, etc.), that's what you can deduct - not the $275 retail value you mentioned. Make sure the school is a qualified 501(c)(3) organization (most public schools are). Keep that donation letter along with your receipts showing what you paid for the materials. You'll report this on your Schedule C as a business expense, likely under "Advertising" since you're essentially promoting your business through this donation.

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Christopher Morgan

•8M

For mixed donations like that, you would indeed split them. Items purchased personally would go on Schedule A as charitable contributions (assuming you itemize deductions), while business inventory items would go on Schedule C as business expenses. For the personal items, remember you need to itemize deductions on Schedule A for them to count, and you'll only benefit if your total itemized deductions exceed the standard deduction. For many people, the standard deduction ($13,850 for single filers in 2024) is higher than their itemized deductions.

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Grace Johnson

•8M

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Genevieve Cavalier

•8M

One thing nobody's mentioned - if your donation to the school was for a raffle, you need to be extra careful. The IRS treats raffles differently than regular donations. The school should have given you documentation that specifically states the donation was for a charitable fundraiser. Just make sure the letter doesn't say it was a "raffle prize" but rather a "donation of goods to support educational fundraising" or something similar. It's a small distinction but can matter if you get audited.

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Genevieve Cavalier

•8M

That wording sounds perfect! It acknowledges your charitable intent while not specifically tying it to the raffle mechanism. You should be good to go with that documentation. I wouldn't request additional paperwork as that might just complicate things. Just make sure you have your receipts showing your costs alongside the donation acknowledgment letter. For business expenses under $250, the documentation requirements aren't as strict, but since your total was $275, having both the letter and receipts provides the complete documentation package you'd need in case of questions.

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