Borrowing a technique familiar to PBS and other non-profits offering perks for donations, Donald Trump has moved his art of the campaign a bit further. It may not quell the clamor for his tax returns, nor stem the calls for an apology to Mr. Khan over Trump’s comments over the death of his son. But it’s an interesting diversion nevertheless. Here is what Trump said:
I’ve spent over four decades of my life making successful deals. And as your next president, I will make great deals that finally put America First! I’ve written all about my history of making successful deals in my best-selling book, The Art of the Deal. And now I want you to have a signed copy with a campaign contribution of $184 today. Friend: The Art of the Deal is now out of print, so this is a very limited edition issue and only available through this special offer through my campaign. Nothing gets done in Washington, because we have too many politicians who have zero experience solving problems in the real world. When I’m president, I promise to change the corrupt culture that has led to gridlock, out-of-control waste, and massive bureaucracy that hurts working Americans the most. But first I want you to read about the unique leadership and business acumen I will bring to the White House in my best-selling book, The Art of the Deal. Get your signed copy of The Art of the Deal with a contribution of $184 today. Thank you and God bless you.”
There’s nothing illegal about tying campaign contributions to ‘free’ gifts. But unlike a gift to PBS, forget the tax deduction. Trump knows that, and probably figures that you know that too. Contributions made to a political candidate, a campaign committee, or a political party are not tax deductible. Of course, creative people try to think of ways around it. For example, if you need legislators on your side to promote laws favoring your business, isn’t that deductible?
Again, no. Sure, it’s possible to make political contributions sound deductible. One common idea is recasting contributions as a business promotion. Suppose you advertise for your business in political convention bulletins? Again, non-deductible. The same is true of ticket prices to dinners or programs benefiting a political party or political candidate, even if the reason you are attending is to help your business.
This may sound strict, but there are real compliance problems, and not just with tax laws. The laws governing elections and election financing are complex too. Fully tax qualified charities can’t endorse political candidates. They can’t hand out materials for or against them, and they can’t raise money for candidates. Charities that violate these rules face serious sanctions, including loss of tax exemption. Even candidates face restrictions. Expenditures in a political campaign or by a candidate are not deductible.
How about paying to attend political conventions, contribute to a political party, cover meals, lodging, travel, advertising, filing fees? Nope. What’s more, a candidate’s personal campaign expenditures aren’t business expenses. Campaign expenses paid from a candidate’s private resources are non-deductible personal expenses regardless of election results. Some politicians have argued–unsuccessfully–that a political office is a stepping stone to another business or profession. Hmm, I wonder if Trump or Hillary have thought of that?
For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not legal advice.
via The Tax Lawyer http://ift.tt/2aNmaDs