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  • 1.  Formula for Culculating Ticket Prices for Event

    Posted 02-25-2025 10:33 AM

    I'm seeking documentation on ticket pricing formulas. We're organizing an event and need guidance on what should be included in the ticket price to calculate the fair market value (FMV). Should the ticket price cover just the food and beverages, or the entire cost of the event?

    What are the best practice standards?

    Best, 

    <cib-overlay> </cib-overlay>


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    Darrin Brown
    Financial and Major Gifts Manager
    Washtenaw Community College Foundation
    dbrown95@wccnet.edu
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  • 2.  RE: Formula for Culculating Ticket Prices for Event

    Posted 02-25-2025 11:11 AM
    The IRS advises us to develop a "good faith estimate" for the "fair market value." See IRS Publication 561 and 526.

    There isn't a formula. Rather, you are to determine what "a willing buyer would pay a willing seller." Indirectly, the entire cost is considered - even if the costs are donated.

    John

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987




    Original Message


  • 3.  RE: Formula for Culculating Ticket Prices for Event

    Posted 02-25-2025 04:23 PM
    It's been awhile since I shared actual IRS language on this topic. As I was preparing a more detailed off-line response to the original post, I figured I would share the same quotes with the list:

    But to help, here's some relevant quotes.

    From IRS Publication 561 on what is FMV:

    "It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts."

    And from the IRS website on "Chartiable contributions: Quid pro quo contributions:" (https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contributions-quid-pro-quo-contributions)

    "Provide the donor with a good faith estimate of the fair market value of the goods or services that the donor received."

    "Good faith estimates of fair market value
    "An organization may use any reasonable method to estimate the fair market value (FMV) of goods or services it provided to a donor, as long as it applies the method in good faith. The organization may estimate the FMV of goods or services that generally are not commercially available by using the FMV of similar or comparable goods or services. Goods or services may be similar or comparable even if they do not have the unique qualities of the goods or services being valued."

    John H. Taylor, Principal
    John H. Taylor Consulting, LLC
    2604 Sevier Street
    Durham, NC     27705

    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987





    Original Message


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