I “donated” a rental property to the city in which the property was located. The city is not considered a charitable organization based on IRS website. How do I remove from my tax return? Would this just be considered a 1231 capital loss? There was no income or expenses for the year. The only thing left to remove is the remaining depreciable life of the house.
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See IRS publication 526. https://www.irs.gov/pub/irs-pdf/p526.pdf
A city government is a qualified organization (page 2).
For property used in business, the value of the deduction is generally limited to your current cost basis (cost plus improvements minus depreciation), or the fair market value, whichever is lower (page 11).
You will need to follow the documentation rules as well. For a non-cash donation valued at more than $5000, you need a signed appraisal, the signature of the appraiser on form 8283, and a signature of an authorized financial agent of the recipient organization (city conservation department or wherever else you donated it). You will need to send the original signed form to the IRS with your tax return. (Keep a copy for your records.) Page 17-20.
You will also want to keep your purchase, improvement and depreciation records showing your adjusted cost basis, for at least 7 years from when you file the tax return.
See IRS publication 526. https://www.irs.gov/pub/irs-pdf/p526.pdf
A city government is a qualified organization (page 2).
For property used in business, the value of the deduction is generally limited to your current cost basis (cost plus improvements minus depreciation), or the fair market value, whichever is lower (page 11).
You will need to follow the documentation rules as well. For a non-cash donation valued at more than $5000, you need a signed appraisal, the signature of the appraiser on form 8283, and a signature of an authorized financial agent of the recipient organization (city conservation department or wherever else you donated it). You will need to send the original signed form to the IRS with your tax return. (Keep a copy for your records.) Page 17-20.
You will also want to keep your purchase, improvement and depreciation records showing your adjusted cost basis, for at least 7 years from when you file the tax return.
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