December 14, 2009
Charities often buy scrip from retailers at a discount and then sell the scrip to the public at face value. In this situation, the charity gave buyers the option to receive the discount in cash or let the charity keep it. Those forgoing the rebate can deduct the contribution. Donors giving $250 or more will need to have an acknowledgment from the charity in hand before they file.
Scrip buyers who keep the rebates will not be taxed on them, either. The scrip rebates are treated as tax free price reductions, Internal Revenue says.
Source: Private Letter Ruling 200945022
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