Church offers parking lot for college game day parking. they hand out paper that indicates the parking fee ($20) is a "donation" to the church. is this tax deductible?

[IreneS]

Yes - But only the part above what you would normally pay for parking at the game. 

[Opus 17]

No, and the church is probably breaking the law by doing so (in two ways).  

First, it is only a donation if the cost you pay is more than the fair market value of the service.  If the church charges $20 but other nearby properties charge $15, then you have a $5 donation (and the receipt has to specify this).  But if the going rate is $20 or more, then no part of what you pay to the church is a donation.  

Second, the church is breaking the law by giving you a donation receipt when it is not.  And third, even though the church is generally tax exempt, this is probably considered taxable “unrelated business income”.   (But that’s not your problem unless you want to file a whistleblower complaint.)

[Opus 17]

This is not a tax issue necessarily, but as a former church treasurer, I would have a real problem attending any church that knowingly breaks the law even just on income taxes, or that continues to break the law after the facts are pointed out to them.  There’s a stewardship component here as well as moral, legal and ethical issues.