Can I Deduct Contributions To Foreign Charitable Organizations?
Many of our clients are charitable – oftentimes, their charitable spirit is displayed within their local community (which makes sense, right); with the church or synagogue they attend, local non-profits, etc. We are often asked the question if these contributions to foreign charitable organizations, such as in Sydney, Australia are deductible. Unfortunately, if you make contributions directly to a foreign religious institution or other foreign charitable organizations, you generally cannot deduct the charitable contribution.
However, you can deduct contributions to a U.S. organization that transfers funds to foreign charitable organizations if the U.S. organization controls the use of the funds by the foreign organization or if the foreign organization is just an administrative arm of the U.S. organization.
There are additional exceptions though. But, they are few. Under the income tax treaties with Canada, Mexico and Israel, you may be able to deduct contributions to certain Canadian, Mexican and Israeli charitable organizations. But, generally you must have income from sources in Canada, Mexico or Israel and the organization must meet certain requirements.
As a client of Tax Samaritan, we can assist you with determining whether your contributions to foreign charitable organizations are deductible.
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Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
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