Can a Nonprofit Founder Deduct Startup Expenses?

Can the organizers of a newly formed 501(c)(3) exempt organization take a tax deduction for personally paying the organization’s expenses during its first year in operation?

Yes. A donor may claim a deduction for contributions made “to or for the use of” a charitable organization. The organization should acknowledge the payments and confirm in writing that no goods or services were received in return (assuming that is an accurate statement) so that the donor has the requisite substantiation letter if ever audited by the IRS.

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