If I donate office space to a Private Foundation (it files a Form 990 pf) for less than market value, can I claim the rental donation as a tax deduction?

[cmcedwards]

If I donate office space to a Private Foundation (it files a Form 990 pf) for less than market value, can I claim the rental donation as a tax deduction? At least the portion above market value?

[DDollar]

It depends. The Internal Revenue Service calls office space donations in-kind donations. The IRS encourages in-kind donations by allowing individuals and businesses to take a tax deduction for the fair market value of the service. For office space, this is sale price of the space if it were placed on the market or the fair market value of a lease. The recipient must be a tax-exempt charitable organization or 501(c)(3). IRS rules do not allow donations for a portion of the owner's interest in a property. For example, if you own a multi-story building and allow a nonprofit to occupy one of the floors for free, you cannot take a deduction. The reasoning is that because you still own the building, you have lost no benefit of ownership.

[cmcedwards]

Thanks DavidD. In this case it would not be a multi unit building but a separate office structure on our home property. The tax exempt foundation would use the entire structure.... a carriage house. In your view would that qualify. Sine we'd be completely unable to rent the house at market value to anyone else. Though of course we continue to own it and our main separate residence. Thanks.


Spoken into my iPad while on the go.  Please forgive typos.

[DDollar]

I think you could make a strong argument for doing so.

[RPro27]

Question in response to your answer to the previous question: Can I donate space, like a pool house or spare bedroom, to a cancer patient in need and file it as a deduction? What about donating transportation to a patient in need?