The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/a-tax-exempt-corporation-can-give-money-to-the-30183646.aspx

Subject:  Re: Can a non-profit do this? Date:  8/2/2012  8:35 PM
Author:  fleg9bo Number:  116492 of 121219

A tax exempt corporation can give money to the gas company, the electric company, the sewer company, the water company. It can give money to a heating contractor, the snow plowing company, and so on. I suppose they are not gifts in the usual sense.

I didn't fully expand on what made me wonder about the tax-exempt aspect of giving to a for-profit company. For example, you give $1000 to Foundation X and you take a $1000 charitable donation deduction on your Schedule A.

Foundation X gives $100 of your money to Private For-Profit Corporation Z. It's as if you made a donation to that private company and got a tax deduction for it. That's what doesn't seem right. Normally you can't send a check to Exxon and deduct the amount, but apparently you can do it through a foundation.

--fleg
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us