Contributions to Foreign Charitable Organizations
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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Randall is the Founder of Tax Samaritan, a boutique firm specializing in the preparation of taxes and the resolution of tax problems for Americans living abroad, as well as the other unique tax issues that apply to taxpayers. Here, they help taxpayers save money on their tax returns.