First determine the tax issue. Then research the issue and determine your conclu

Question

First determine the tax issue. Then research the issue and determine your conclusion. Finally, write up your results using the following format:

-Issue (Describe the tax issue, i.e., the question that you are researching

-Conclusion (The answer to the tax question)

-Discussion of Reasoning and Authorities

1.)Deducting Charitable Contributions.....

Your clients, Sonny and his wife Honey, believe in worshiping Ta-Ra, the Sun God. To practice their religious beliefs, they take a weeklong trip to Hawaii to worship Ta-Ra. The cost of this pilgrimage (including airfare, hotel, and meals) is $2,800. Sonny wants to know if he can deduct the cost of this trip as a charitable contribution.

Research Aids: Kessler, 87 T.C. 1285 (1986)

Explanation / Answer

Issue – Whether amount of $2800 incurred for week-long trip (cost includes airfare, hotel and meals) to practice religious beliefs is deductible as charitable contribution

Conclusion – The amount of $2800 incurred can be deducted as a charitable contribution.

Discussion – As per publication 526 of IRS, the expenses incurred towards airfare, hotel and meals can be deducted as charitable donation, provided a significant amount of time of the trip is used for volunteer service with a qualified organisation. Most of the churches, temples, synagogues, mosques and other religious organizations. Hence the temple of Ta-Ra, The Sun God could be a qualified organization.

As per the publication, in general one can claim a charitable contribution deduction for travel expenses necessarily incurred while one is away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether expenses are paid for directly or indirectly. One is paying the expenses indirectly if one make a payment to the charitable organization and the organization pays for travel expenses.

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