Side Deal Renders Contributions Non-Deductible

So you think you can donate to a charity, and at the same time enter into a “side agreement” with that charity to return the asset to you if IRS disallows your deduction?

It won’t fly.

See the recent decision in Graev, where the Tax Court ruled that a taxpayer wasn’t entitled to charitable deductions for contributions of a façade easement on an historic property, or his related cash donation to a charity, because of the existence of a “side letter” which stated that the charity would return the cash and remove the easement if the IRS disallowed the deductions.

The gifts were “conditional,” and thus not deductible, ruled the Court.