College Football Fans Fret Over Tax Deductions

WSJ What's News
|

Automatic TRANSCRIPT

College. Football fans are struggling with a change in the nation's tax code that. No longer allows them to write off the bulk of their season ticket costs that deduction was repealed with the nation's tax overhaul. Joining us now in our studio to explain is Wall Street Journal reporter, Rachel Bachman. Rachel, can you explain how the old right off worked and how it's changed this year? Yes, we'll staple of college athletic departments. For decades have been premium seats at prime sporting events that require a mandatory seat donation, and these donations were eighty percent deductible, which of course, made them more attractive to the buyers last year's tax law. Repealed that deduction and so now schools have to decide how they're going to handle those tickets and fans have to decide if they're going to pony up the full amount with no deduction, why did the federal government seek this change? That's a great question. The short answer is I don't know. I think there's been some discussion about whether this is a sort of a boondoggle, you know, that that it's a. Tax break that isn't necessary and might be a little excessive, and you found out that this is playing out differently depending on the college we're looking at and they're also seems to be some confusion about the write offs are colleges pushing the IRS for more clarification on the change. They absolutely want. More information. It is clear from the law that the seat donations the direct requirement to donate money to in order to secure certain premium seats that is not tax deductible anymore, and that's settled. But what's not settled is what happens with larger donations that also might help you get better seats at the stadium. So for example, if I'm a big donor, and I want to donate to expand the football stadium or to rebuild the locker room say one hundred thousand dollars if I donate that money. I might also get priority points that would help me lift in the fan pecking order and one day get the right to move into better seats in the stadium. What schools don't know is whether those donations can also be tax deductible. Under the new law. So how much of a financial hitter they reporting how much do these specific types of donations make up for colleges will they can make up tens of millions of dollars a year. They're they're really an integral part of of the annual fundraising that all of the college athletic departments. Do certainly the prominent ones and it varies greatly from from place to place from what I can tell most fans are just going to eat the cost, and you know, it for for a lot it won't be very big. For instance, a season ticket often costs maybe four or five hundred dollars a fan might pay an additional five hundred dollars to secure a priority seat. So, you know, if you if you do the math, it might only increase that person's costs by a couple of hundred dollars and for most loyal fans. That's just not gonna make the difference. And you spoke to fans and colleges. How are they coping while they await further clarification of this nervously, a number of schools really didn't wanna talk to us. I think that's because they're not entirely. Sure what the IRS is going to say. And they also don't want to scare off their fans and donors. They don't want to discourage any type of giving, of course, some schools just are simply proceeding businesses usual and are just hoping that fans will keep coming. Rachel. Did you talk to anybody who knew this was coming? And were it was able to get ahead of the law before the change will. Yes, this was actually a big fear of a lot of schools. And so many of them told donors, you know, you can pay ahead sometimes several years ahead to take the deduction now and really delay the decision about whether you're gonna reappear season tickets into the future and many people did just that. That's Wall Street Journal reporter, Rachel Bachman. Joining us in our studio. Thank you so much Rachel. Thank you.

Coming up next