Question

In 2019, Gale and Cathy Alexander hosted an exchange student, Axel Muller, for 9 months. Axel was part of International Student Exchange Programs (a qualified organization). Axel attended tenth grade at the local high school. Gale and Cathy did not claim Axel as a dependent but paid the following items for Axel’s well-being: Food and clothing $1,500 Medical care 200 Fair market value of lodging 2,700 Entertainment 100 Total $4,500 Gale and Cathy have asked for your help in determining if any of the $4,500 can be deducted as a charitable contribution.

Answer 1

Whittenburg and Gill, CPAs

San Diego, CA

May 25, 20xx

Mr. and Mrs. Alexander

233 Rosa Drive

San Diego, CA

Dear Mr. and Mrs. Alexander,

Thank you for requesting my advice concerning the deductibility of the expenses paid for Axel. I have researched your question and am happy to say that a portion of the amount paid for the well-being of Axel is deductible as a charitable contribution.

The IRS allows a deduction of qualifying expenses limited to $50 a month for each full month that Axel lived with you. For any month that he lived with you for 15 or more days, that month counts as a full month. Qualifying expenses include food and clothing, medical care, and entertainment. The fair market value of lodging is not deductible. Given that Axel lived with you for 9 months, you are entitled to a charitable deduction of $450 ($50 x 9 months).

In order to claim the charitable contribution, you must submit with your return the following items: a copy of the agreement with the sponsoring organization, a summary of the various items you paid, a statement that provides the date Axel became a member of your household, the dates of his full-time attendance at school, and the name and location of the school.

My conclusion is based upon the facts that you have provided me. If you have any questions or would like further explanation, please don’t hesitate to call.

Sincerely,

Trevor Malcolm

for Whittenburg and Gill, CPAs