Under what circumstances is a membership a deductible donation?

Question

I'm a member of the Chicago Children's Museum, which is a 501(c)(3) cultural organization. I pay $115 a year in membership dues. That membership includes free admission and a 10% discount on food and merchandise.

In doing my taxes this year, I was looking into deductions, and noticed that they list the following on their website (on the page linked above):

Under IRS guidelines, Family and Explorers memberships are 100% tax deductible, and receipts or cancelled checks should be retained as proof of membership purchase. Donor-level members (Builders and Inventors) will receive written acknowledgment from the museum regarding the tax-deductible portion of their memberships.

These two memberships are $115 and $145, respectively, annually. The next membership up (Builders) is $250 annually.

This is in conflict with the IRS regulations as I read them:

Certain membership benefits can be disregarded. Both you and the organization can disregard the following membership benefits if you get them in return for an annual payment of $75 or less.

This is over $75, so I would think they'd need to issue letters for all of their memberships, given admission does count as a benefit from my reading of this (just not at the under $75 level).

Is the museum wrong, or am I misreading the IRS regulation? My only thought is that perhaps the $75 is per person (so my wife and I each get $75, or $150 in total)? I also have two other museum memberships who don't mention deductibility; one is $85, the other is $155. Are either deductible? (Both are 501(c)(3) organizations.)

I may contact the museum, but suspect they'll tell me to talk to a tax professional, given their website's disclaimer on the subject.

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Edit: I contacted the museum, and they unsurprisingly simply reiterated that I can attach a printout of the website's note (above) along with the receipt for the payment and be good to go. I'm curious if they are actually claiming there is no tangible benefit to the museum membership - as that would mean they're not required to issue a letter if there isn't a tangible benefit.

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This is related in part to this question, although the specifics are somewhat different; some of those answers, though, may be useful to others finding this question.

Answer 1

Admission or discount for the donor that is inherent in the membership level is not usually considered a tangible benefit. If they give you coupons for a limited number of additional admissions or shows or whatever, those are generally taxable; I've had to return those to some museums to make my donations fully deductible. (Luckily, after I pestered them about this for a few years they made that part of the membership package optional and issue the correct letter saying that it was declined.)

If the museum is telling you that nothing in the membership is considered a tangible benefit, you can generally believe them. They want their donors to keep donating, so they'll try not to spring any surprises on you.

ADDENDUM: If in doubt, there is always the option of sending only a donation rather than accepting a membership. (Or splitting the money between the two.) Straight donation avoids the issue completely, and while this may confuse the museum they will be glad to accept the donation either way.

Answer 2

What about this section just under the part that you quoted:

Exception. An organization will not have to give you this statement if one of the following is true.

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3. You receive only membership benefits that can be disregarded, as described under Membership fees or dues , earlier.

Answer 3

This is what I would do.

• Take the most basic membership plan they have: Family (for 4) $115
• On another page on the site the cost of an child/adult ticket is $14.
• It is reasonable to assume that many people purchase the membership do so just before walking in the door. I would subtract 4x14 from the $115 price.
• That would result in a donation of $59
• Do the same for the Explorers (for 6) and you get a benefit of $61

Note that if you have 3 in the family the donation is $73, if you have 5 in the family the donation is $75.

I would print out the receipt for the donation, and a list of ticket prices and write down $59/$73/$61/ or $75, whichever is appropriate for you family size. Keep all the docs in case the IRS wants to see them.