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.
With pressure mounting on nonprofits to consider affiliations with other organizations, this workshop is designed to help you better navigate the world of mergers, acquisitions and affiliations. Unlike the corporate world, there are no financial "matchmakers" to help nonprofits identify successful partners for a merger. Learn more in our pre-recorded webinar.
Weekly question and answer
Notice of each full edition
and its free stories
Report on 501(c)(3) electioneering
What our readers say about Nonprofit Issues
Once again you've tackled a tricky question and explained it so we all can understand the issue.--M.V.
Thank you for your informative and keen advice on nonprofit matters. I believe it's a unique and concise place to get answers to this often wispy area called nonprofit. --R.T.
Have a question?
Other ways to
Talk to the Editor
Next Conference Call:
Thursday, March 20, 2014
Participate in this bi-monthly telephone seminar conference call and ask your questions directly to Editor Don Kramer.
Access the entire site
($9.95/24 hours, $17.95/3 months).
Full Day Program
A well-received full-day program that covers the current hottest topics in nonprofit law. Qualifies in Pennsylvania for Continuing Education credits.
Don is available for programs and speaking engagements ranging from a one-hour presentation to a full-day primer on nonprofit law. Contact us if you are interested in having him speak at your program.