In 2014, 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 well­being:

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.

Required:

Go to the IRS website (www.irs.gov) and locate Publication 526. Write a letter to Gale and Cathy answering their question. If they can claim a deduction, be sure to include in your letter the amount that can be deducted and any substantiation requirements. (An example of a client letter is available at the website for this text located at www.cengagebrain.com.)