@JohnASmith wrote:
Two experts are now advising me that the scenario I described is a no-go. I believe you are both likely correct, but can I ask a question regarding basis being the only allowable deduction? If I bought land 10 years ago for $20,000 and I donated it today to a charity, when it's appraised at $100.000, I can only deduct the $20,000 basis? That's definitely not what charities are telling doners.
There are a number of special rules here. See publication 526, starting on page 12, for "giving property that has increased in value."
https://www.irs.gov/pub/irs-pdf/p526.pdf
There are different rules for ordinary income property (property that would result in ordinary income if sold) and capital gain property (property that would result in a capital gain if sold). And within the capital gain category, there are different rules for real property (land with anything attached) and tangible personal property (items that you can hold, more or less). And there are special rules and limitations depending on what kind of charity the recipient is.
So yes, in general, if you donate land to the right kind of charity, you can claim the current FMV and not the basis. However, for items that are considered "ordinary income property", you can only claim the basis. And you can't take a deduction for the value of personal services (page 6-7). So whether you consider that you are donating your personal services, or you are donating property that you would normally sell (blueprints), your deduction value is limited to your basis, unless you report the item as a sale by your business and pay tax on the income (see page 12, column 2, under "Exception".)
