Monday, November 24, 2008


Important Edit:  I totally messed up and made this sound like there was only one person, one friend that I'd talked to who mentioned this idea.  Actually, after I had heard it from 3 multi-sport friends, I thought I'd dig in deeper.  I'm by far NOT the expert on this, and I welcome some opposing thoughts and ideas.  To my good friend, you know who you are, I'm very sorry for my one-sided post.

I hate to burst your bubble. I really do. There are folks out there that have and are planning to enter an Ironman event through a Community Slot and then write off all of their travel and training expenses, as well as the entry fee, as a charitable donation. Sounds good on the surface, and their CPA says it's perfectly ok.

Of course they do. And of course, the IRS audit is all on you.

Other than actual cash or non-cash donations given directly to a qualified charitable organization, like the NAS Community Fund, a registered 503 (c) charitable organization, it is possible to also deduct unreimbursed Out of Pocket Expenses. It is stipulated in IRS Publication 526, however, howthese expenses must be incurred: "you may be able to deduct some amounts you pay in giving services to a qualified organization". It is in that stipulation that I have a hard time wrapping my mind around.

What service to any organization is served in competing in an Ironman? The list of recipients of Community Funds is long and genuine, but no physical 'serving' is accomplished in the 17hrs or less of Ironman toil. When you donate money to church, for example, do you write off your job expenses because you were using that job to raise the money you donated? No, and you couldn't if you wanted to. Could you write off expenses you incurred while volunteering at a church function? To some degree, yes. The service must be directly related to the charitable contribution, not as a result of it.

Put it this way: your church service example is such that your actions while volunteering directly contribute to the raising of money for the charitable organization. Your actions at Ironman are a byproduct of your initial charitable contribution. If you contributed and didn't race, the charity would not suffer in the least.

Perhaps it is a subtle distinction, and I'm sure someone with more accounting and tax experience than I, like a CPA, could argue for the deductions. I'd be curious to see how the deductions held up to the scrutiny of an IRS agent, however.

One of the interesting documentation requirements of the deduction is that in addition to keeping the appropriate record of the expenses, the taxpayer MUST also obtain acknowledgement from the charitable organization that contains:
  • a description of the service you provided
  • a statement of anything you received as reimbursement (if any) for your expenses
  • a valuation of any goods or services you received
  • a statement that only intangible benefits were received.

Good luck getting that statement before filing your taxes. Oh yea, and try and put a value on the benefits of Community Slot entry - the fleece, the visor and backpack. Oh, and entry into an otherwise sold-out event. So what is the value of entry to an event otherwise unable to enter? Does that move into the realm of "Tangible benefit" vs. intangible? Good question.

The $775 donation is, of course, charitable and deductible (of course, only if you use a Schedule A - do you have a mortgage? If not, then you probably don't itemize your deductions, and therefor, disregard this whole post - you can't deduct your charitable donations period). Please, someone, shed some light on how the expenses can also be deductible!

Sorry, btw, for the boring tax-related post.

Edit: I don't know how often this has happened in the past, but I was inspired to write this when a friend said his CPA had already said it was ok. I looked at the IRS Pub that covers this part of Tax law, and of course it was clear as mud. Getting the documentation, for those out there that are still going by what their CPA "who has done taxes for years" says is ok, will be the kicker - as is the general argument that the act of racing is not a service to a charity. Perhaps something like the MS ride series - where you personally solicit donations and those are based on your completion of the event - could be a valid example of training and travel expenses that are deductible. I doubt the IRS Agent completing your audit will be so impressed with your IRONMAN finisher's medal that he or she will overlook your $5k in Charitable Iron Expenses.

Wake UP!

Saturday, November 22, 2008

Episode 16 is out!

Oh yea...that's right....Episode 16 - the Tampa Reunion show is out. Good stuff. Our shortest episode yet.

Monday, November 10, 2008

The Rundown

  • Picked up Tri Rob and his buddy on Wednesday. Ate a healthy dinner. Dude dislocated his shoulder doing the Airport Shuffle. I brought him a sling. It was very sexy.

  • Tacboy rolled in on Friday night. Turns out that not only do we have similar senses of humor and comedic timing, we both have no problem lying around and watching movies instead of going out. Translation: we are old men.

  • Spectated the 70.3 Championships in Clearwater Saturday. Met up with a pro's wife and cheered for her hubby too. Tac knew many more people there than I did. Watched Tri-Rob finish his race, went home and took naps. Affirmed: We are old men.

  • Sunday morning Tac dragged me out of my own house for a 5.5 mile run. Everything now hurts. I hope everything now hurts him too. Guess it's time to start training again. Also, Tac wears more IM schwag than any 3 people. Shamelessly adorns himself with layer upon layer of overpriced finisher clothing. There has to be some sort of therapy group he can go to....

      • Met Tri-Rob at his hotel and did the dinner thing with his buddy and his coach...Coach Liz. Cool chick - she says it like it is. I instantly liked her. Met Brian Dunn (super stud) and his mom (super studdette) pool-side at Rob's Hotel. Turns out their heritage of "redneck dutch" is the same as mine. They just hail from the side of Holland with the smaller, crazy fast folks. My ancestors stuck their finger in the dike and held it together while his ancestors ran and got help. Small, yet important distinction.

      • Got Rob to the airport on time, hoping that he didn't break anything getting to his flight. Overall, a great weekend.

      Monday, November 03, 2008

      Perfect end to a political discussion

      Other than it being a clearly Obama-biased show, this was the perfect end to any political discussion amongst friends...

      Great Weekend

      • No longer cutting grass for a living.
      • Saw a bunch of new Ironman finishers this weekend
      • Am crazy-busy installing blinds and window treatments
      • Picking up Tri-Rob and his friend on Wednesday for the Clearwater 70.3 Champs...
      • Possibly having Taconite Boy over for the race - we'll see
      • Time for a mezzo-schedule motivational training plan!
      • Did you see the cheater at IMFL? I'll dedicate a full post to that yahoo....
      • What do we name our team for the Minnesota Border to Border?