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I donate my vacation condo as an auction item for some of the 501(c)(3)'s with which I am involved. Frequently it goes for $2000/wk or more. More often than not, although I don't request it, I receive a letter from the charity telling me I can claim a $2000 charitable contribution deduction.  Is this correct?

No.  The donation of services or use of facilities to a charity is not deductible. You should not claim any deduction for the use of the condo, and a charity that tells a donor to deduct the value of the use is not doing its donor any service. 

The purchaser at the auction may claim a deduction to the extent that the purchase price is greater than the fair market value of the use, but would get no deduction if the payment is less than the fair market value.  From the purchaser’s point of view, it is a standard “quid pro quo” situation.  (See Ready Reference Page: “Charities Must Set Value on 'Quid Pro Quo' Gifts.")

The result of this gift to you could actually be more costly than not getting a contribution deduction. If you rent the condo frequently and seek to deduct its costs from your personal income tax, your deductions may be limited if you use it personally for more than 14 days a year or 10% of the rental days, whichever is greater.  The use by the charity or the purchaser without payment of fair market value rent to you is considered personal use and cuts down on the time you can use it yourself without exceeding the limit and potentially cutting your deductions.

Article Archives >> To the Point

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