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I'm not trying to be argumentative, but I don't think CF is correct about deductibility of raffle tickets. I will post the IRS rule as soon as I find it, but here are the details from a U. of Calif. web site. You also need to check the laws of the state in which the raffle is held so that you don't find out after the fact that you have broken the state law and all the proceeds end up in the state's pocket instead of CF's. I know it's a pain in the butt, but that's what needs to be done. You may even need to notify or register the raffle with the state where it is "held". I don't know about the rules when you go to multiple states promoting the raffle.
"Raffles. The IRS holds that amounts paid for chances to par-
ticipate in raffles, lotteries, or similar drawings, or to parti-
cipate in puzzle or other contests for valuable prizes, are not
gifts and therefore not tax deductible.
Caution must be exercised in any drawing involving prizes so that
it does not fall within the definition of a lottery prohibited
under Section 319 of the California Penal Code, as follows:
. . . any scheme for the disposal or distribution of
property by chance, among persons who have paid or
promised to pay any valuable consideration for the
chance of obtaining such property or a portion of it,
or for any share or any interest in such property, upon
any agreement, understanding, or expectation that it is
to be distributed or disposed of by lot or chance,
whether called a lottery, raffle, or gift enterprise,
or by whatever name the same may be known.
In other words, if (1) a prize is given by a method involving
(2) chance for a (3) consideration paid by the participant, the
award of that prize would be considered an unlawful lottery.
If, however, prize tickets used in a raffle are available free
upon request to the public, the element of consideration would be
lacking and the distribution of prizes would not then constitute
a lottery. The fact that a purchase is not necessary would have
to be printed on all promotional materials and on the tickets
themselves."
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