Wednesday, December 10, 2008


Q. Just wondering -- if we buy candy, 50/50 raffles, etc. from co-workers/friends/family for the benefit of schools or scouts, are we allowed to deduct the expenses on our tax return? (Sometimes, each order amounts to $40 or so.) If yes, should we pay by check each time?
A. When giving me a list of charitable contributions for the year many clients will include the cost of raffle tickets, including 50-50s, purchased for the benefit of a church or school. Regardless of who is selling them (i.e. church or charity) 50-50 raffle tickets, or any kind of raffle tickets, are not charitable contributions - they are gambling. To repeat - raffle tickets are not deductible as contributions.

If you are reporting taxable gambling winnings on Line 21 of your Form 1040 - from whatever source (i.e. casinos, racetrack, lottery, raffle, etc) - the cost of raffle tickets are deductible as a gambling expense (to the extent of the winnings reported) as a miscellaneous deduction (deductible in full – not subject to 2% of AGI exclusion) if (and only if) you itemize on Schedule A.

The only possible instance in which you could claim a charitable deduction for a raffle ticket is if you purchased a ticket and then donated the ticket itself back to the charity so they could sell it again. In such a situation you would not have any chance of winning the item(s) being raffled.

For the most part the purchase of candy, cookies, etc from a church or charity (most common example being Girl Scout Cookies) is not deductible as a charitable contribution. You are not making a contribution - you are buying something of value for a fair market price.
The only exception would be if, for example, the normal market value of a box of cookies is $3.00 and the charity is selling them for $10.00. In this case $7.00 would possibly be deductible. But in most cases the cookies and candy are being sold for pretty much what you would pay in the store - so no tax deduction.



Tiffany Carlson said...

If someone wins the 50/50 and then donated their winnings back can they claim that? And do they have to claim the winnings on their taxes as well as gambling winnings.

Robert D Flach said...

TC -

Perhaps the better thing to do is for the winner to “disclaim” the winnings so the money reverts to the charity. In this case he/she never received any winnings and no 1099-G would need to be issued and no income reported on the 1040.

While accepting the winnings and donating the money back to the charity would provide a tax deduction on Schedule A, and result in a wash, having to claim the winnings upfront would increase AGI and could affect other deductions or credits.

Does anyone disagree?


Anonymous said...

What if I won money in a 50/50 raffle but the 501c3 that organized the raffle never sent me a form to report the income? I won in early 2014 and it is now February 7, 2015 and I haven't received anything. Do I report it on my taxes anyway even though I don't have any proof?

Robert D Flach said...


Of course! You must report taxable income received even if you do not receive a Form 1099 or W2-G.

The organization is not required to issue a Form W-2G unless the win is "$600 or more, and at least 300 times the amount of the wager".

Of course you can deduct gambling losses, including the cost of the 50-50 ticket, up to the amount of the win on Schedule A.