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IRA distributions for museum membership gifts with benefits

We have two associated organizations with memberships that include some levels with benefits. The usual gift and receipt are not an issue, we are very comfortable with our standard format indicating the tax-deductible gift and the FMV/Benefits portion of a donation. Example:  $250 payment=$50 benefit (free passes) & $200 tax-deductible gift.

We have encountered a new-to-us situation - an IRA distribution for museum membership at a level where the donor wishes to receive the benefit (free passes) in addition to the general/basic membership(allowable under IRS guidelines).

In our reading of section 408(d)(8), specifically 408(d)(8)(C), the donation cannot be split and therefore the donor cannot receive the free passes. Example: The distribution is $250, but we cannot deduct $50 for the benefits (free passes), to yield a $200 QCD.

"(C)Contributions must be otherwise deductible

For purposes of this paragraph, a distribution to an organization described in subparagraph (B)(i) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph)."

I'm checking with this forum that our reading of these regulations is correct before we work with the museums on the response to this donor as well as general messaging for appeals and membership forms. 

I would be interested in how other organizations communicate these nuances to their donors (and non-Advancement Services staff).

Thank you in advance for your sharing your expertise!

IRA distributions for museum membership gifts with benefits

We have two associated organizations with memberships that include some levels with benefits. The usual gift and receipt are not an issue, we are very comfortable with our standard format indicating the tax-deductible gift and the FMV/Benefits portion of a donation. Example:  $250 payment=$50 benefit (free passes) & $200 tax-deductible gift.

We have encountered a new-to-us situation - an IRA distribution for museum membership at a level where the donor wishes to receive the benefit (free passes) in addition to the general/basic membership(allowable under IRS guidelines).

In our reading of section 408(d)(8), specifically 408(d)(8)(C), the donation cannot be split and therefore the donor cannot receive the free passes. Example: The distribution is $250, but we cannot deduct $50 for the benefits (free passes), to yield a $200 QCD.

"(C)Contributions must be otherwise deductible

For purposes of this paragraph, a distribution to an organization described in subparagraph (B)(i) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph)."

I'm checking with this forum that our reading of these regulations is correct before we work with the museums on the response to this donor as well as general messaging for appeals and membership forms. 

I would be interested in how other organizations communicate these nuances to their donors (and non-Advancement Services staff).

Thank you in advance for your sharing your expertise!

Thank you John! We knew you'd have the answer!

We will need to follow up with the donor as the check does not indicate if it is a QCD or RMD and we will proceed from there. 

IRA distributions for museum membership gifts with benefits

We have two associated organizations with memberships that include some levels with benefits. The usual gift and receipt are not an issue, we are very comfortable with our standard format indicating the tax-deductible gift and the FMV/Benefits portion of a donation. Example:  $250 payment=$50 benefit (free passes) & $200 tax-deductible gift.

We have encountered a new-to-us situation - an IRA distribution for museum membership at a level where the donor wishes to receive the benefit (free passes) in addition to the general/basic membership(allowable under IRS guidelines).

In our reading of section 408(d)(8), specifically 408(d)(8)(C), the donation cannot be split and therefore the donor cannot receive the free passes. Example: The distribution is $250, but we cannot deduct $50 for the benefits (free passes), to yield a $200 QCD.

"(C)Contributions must be otherwise deductible

For purposes of this paragraph, a distribution to an organization described in subparagraph (B)(i) shall be treated as a qualified charitable distribution only if a deduction for the entire distribution would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph)."

I'm checking with this forum that our reading of these regulations is correct before we work with the museums on the response to this donor as well as general messaging for appeals and membership forms. 

I would be interested in how other organizations communicate these nuances to their donors (and non-Advancement Services staff).

Thank you in advance for your sharing your expertise!