You can deduct charitable donations made to qualified religious schools or colleges, but not all donations automatically qualify. Be careful if you are contributing money to a school that your child or grandchild attends.
Case in point: A married California couple paid to have their three children attend two private,
religious schools that combined traditional schooling with a religious education. Based on an allocation of the school day?s activities, they deducted 55 percent of the cost of the tuition as a charitable donation. The day consisted of 55 percent religious education and 45 percent secular education.
To qualify as a charitable contribution, the Tax Court stated, a gift must be made out of a "detached and disinterested generosity or out of affection, admiration, charity or like impulses."
? Sklar,TC Memo 2000-118
The IRS and the Tax Court denied the charitable deduction. "A tuition payment to a parochial school is generally not considered a charitable contribution because the taxpayer making the payment receives something of economic value . . . educational benefits, in return," according to the Tax Court.
The Appeals Court agreed and noted that the couple failed to show that the nearly $24,000 in tuition payments they made exceeded the market value of a secular education (Sklar, CA-9, 1/29/02).
Lesson to be learned: Keep your payments for education and charity separate and apart. Make sure you receive a detailed breakdown of payments from any school you give money to, especially if your child or grandchild attends classes there.