Our school had an auction and we won a couple of items. The auction was through GalaBid. Given that neither had an actual cost or food, how do I determine fair market value for purposes of deducting on my taxes?
1. A nerf battle with a specific teacher – $120. Kids got to bring a friend, but only the auction winners and their friends participated. A bunch of different teachers were included in the auction, so a bunch of kids got to go to this same experience together.
2. Front row seats for a school program – $105. Tickets for all other attendees were free. These gave us reserved seats so we didn't have to stand in line.
It depends. First of all, if you won a prize, the Fair Market Value (FMV) of the prize is income to you , not a deduction. Did you receive a 1099-MISC for these prizes? Is that what the $120/$105 amounts refer to, or is that the price of your auction tickets?
If you are trying to determine your charitable donation for the auction tickets, generally the cost of raffle tickets is not deductible.
I will say, though, that there doesn't seem to be much value in these prizes, because they are so specific to your school, and wouldn't be worth any significant amount to a non-related party. I can understand the argument that the cost of the tickets was a donation because the prize was of no measurable value, but the IRS may not agree.
See Charitable Contributions You Think You Can Claim but Can't
Thank you for the reply. The prizes were experiences and not monetary. The amounts were how much we paid to win the auction items. People were bidding online to win. There were no raffle tickets or tickets of any kind for anything. The auction itself is a fund raiser for the school. Does this help clarify?
To clarify further, the attendee “tickets” I mentioned were to show that no one paid for entry to the event. Nobody actually had tickets.
It is unlikely that your cost toward the auction items is deductible. Only contributions to qualified charitable organizations are allowed for purposes of deducting charitable contributions. For example, donations to GoFundMe accounts are not deductible. However, a donation to the Red Cross would be deductible. Unless the donation went directly to a nonprofit, it will not be deductible.