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2000-5 Tax-Deductible Contributions
April 17, 2000
XXXXXX X. XXXXX, Management Analyst
XXXX County Administration
300 XXXXXX Avenue
XXXX XXXXX, Michigan XXXX
Dear Mx. XXXXX:
Thank you for your questions relating to the County receiving donation for "Millennium Park," a County park. Following are my responses to your questions.
As we discussed, the County may accept donations to a County Park and receive those funds into the existing special revenue County Park Fund. Separate accounting for the donations would be by reflecting a separate activity in the Park Fund for the "Millennium Park" project and close the donations and related income (probably interest) and the project activity into a Reserve of Fund Balance.
A separate special revenue "Millennium Park" Fund may be established, if the County prefers, to separately account for the donations and their expenditure.
2. In what way must the fund and the interest it earns be structured to provide those tax advantages to private donors?
There are no special requirements for the establishment of such a fund to meet the stated goals. Gifts (donations) to the United States, a US possession, a state, city, town, or Indian tribal government are deductible as an itemized deduction on Federal income tax. The gift must be for public purposes and be directed to a government unit, or it may be to a government agency such as a fire department, civil defense group or a committee to raise funds to develop land into a public park.
A State of Michigan tax credit is available for contributions to a Michigan municipality for the smaller of 50% of the contribution or $100 ($200 for a joint return).