Year-End Tax Planning for College Football Fans

Year-End Tax Planning for College Football Fans

Article posted in Income Tax on 20 December 2017| comments
audience: National Publication, David Wheeler Newman | last updated: 20 December 2017


David Wheeler Newman offers a particular and strategic insight into the new tax legislation. Especially if you're a college football fan.

By: David Wheeler Newman, originally published on the MSK blog

Fans of college athletics may have heard something about tax legislation barreling through Congress this month, and didn’t pay much attention since it sounded like boring stuff that only meant something to big tech companies stashing their billions overseas.  But buried in the 500 pages of the legislation that has now passed both chambers is a year-end tax planning opportunity for sports fans.  Or, more precisely, a tax break that has been available to sports fans for over thirty years will be eliminated starting in 2018.


Generally, when a donor receives a substantial benefit for a payment to charity, that payment is not deductible as a charitable contribution.  However, in the case of certain payments to colleges and universities, there were apparently enough Senators from states with strong football schools who came up with a special rule for contributions for which the donor receives the right to purchase tickets or seating at an athletic event.  That tax incentive for spectators allows the fan to treat 80% of a payment to a college or university as a deductible charitable contribution, if the payment would qualify as a charitable deduction but for the fact that the fan receives the right to purchase tickets for seating at games.

For example, under this special rule, if an alumnus contributes $5,000 to his alma mater to join the Booster Club, and only Boosters have the right to buy seats in the most desirable section of the stadium or arena that have not been available for purchase by the hoi polloi for generations, the alumnus may claim $4,000 as a charitable contribution deduction so long as none of the payment is for the actual tickets, but only for the right to buy the tickets.

Tax Break for Fans will be Eliminated

Now, the versions of the “Tax Cuts and Jobs Act” passed by both the Senate and House will eliminate the special rule, with the result that Boosters will no longer be able to deduct their payments for college sports seating rights, starting in January.  Why is Congress doing this to us?  Have they lost their love of sport?  Or are they simply looking every place in the tax code they can possibly look to eliminate tax breaks to help offset some of the revenue lost by reducing taxes on business?  We suspect it is the latter, even though it’s like wanting to buy a shiny new car and looking under the sofa cushions for loose change to come up with enough cash to pay for it, but either way, fans of college sports have one last chance to make payments during the remaining days of 2017 that will qualify for charitable deductions under this special rule.

So the year-end tax planning opportunity for fans of college athletics is to make these payments before the end of December, since this will probably be your last chance to claim a deduction for them.

Fundraising Idea for Colleges

Eliminating the tax subsidy for seating rights may degrade an important revenue source for collegiate athletic programs.  But maybe this is an opportunity for schools to take advantage of the impending change and offer alumni a one-time opportunity to buy seating rights not just for one season but for the future.  Why not offer Boosters the right to pay $50,000 for the right to buy tickets for their same seats for the next ten years, so long as the payment is made before the end of December, thereby giving these sports fans an opportunity for a $40,000 deduction?  Creative thinkers needn’t stop there – how about a much larger year-end gift for the right to renew those tickets for life?

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