Transfers involving “personal benefit”
Have you ever wondered why tuition for a child to attend a university is not deductible as a charitable contribution? This is known in gift law as as a “personal benefit” transfer. The benefit of education for the child is equal to the tuition paid and there is no charitable gift.
Another example of personal benefit transfer would be payment to a charity for specific services; such payments are not deductible. In Hernandez v. Commissioner, the United States Supreme Court determined gifts of fixed amounts to the Church of Scientology for personal counseling were not deductible. The Court held that such “gifts” were more appropriately considered payments for services rather than charitable contributions.
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