Donation — Exempt Organization

October 22, 1979 BIR RULING NO. 095-A-79 Donation exempt organization This refers to your letter dated October 15, 1979 requesting clarification on the tax implications of the donations to be received by that University, which is a non-stock, non-profit educational institution duly registered with and recognized by the government. It appears that said donations will be utilized in the construction of a new Engineering Building of the University. In reply, I have the honor to inform you as follows: 1. The above donations are deductible in full from the gross income of the donor and/or contributor, it appearing that said donations are not for the payment or granting of salary increase, bonus, or personal benefits to any of your school officials, faculty and personnel, pursuant to Section 30(h) (1) of the Tax Code of 1977, as amended. Such donations, therefore, are not covered by the 3% and 6% limitations, prescribed by Section 30(h) of the same Code. The donations are exempt from donor's gift tax, provided that not more than 30% of said gifts shall be used by that University for administration purposes and provided further that University is incorporated as a non-stock entity, paying no dividends, governed by trustees who receive no compensation, and devoting all its income, whether student fees, or gifts, donations, subsidies or other forms or philanthropy, to the accomplishment and promotion of the purposes enumerated in its article of incorporation. (Section 123 (a)(3), Tax Code of 1977, as amended). cdt 2. This Office will require from the Donors the presentation of the official receipts issued by that University to support their claim for full deductions of the donations in their income tax returns, pursuant to Section 116 of Revenue Regulations No. 2, pertinent portion of which is quoted as follows: "SEC. 116. When contributions or gifts may be deducted . . . . "In connection with claims for deductions, there shall be stated on returns of income the name and address of each organization to which a gift was made and the approximate date and the amount of the gift in each case. Where the gift is other than money, the basis for calculation of the amount thereof shall be the fair market value of the property at the time of the gift. Contributions of gifts paid or made to corporations or associations specified in the law will only be allowed as deduction when the taxpayer attaches to his return the receipt duly signed by the responsible officer of the corporations or associations to which the contributions or gifts had been paid or made . If desired, said receipts will be returned to the taxpayer after they have served their purpose." (Emphasis ours) cd