a nonprofit charity received a large donation of toys but had no place to store them. I decided to rent them a storage unit where they can store all of their toys. Does the rent and insurance I pay on this unit qualify as a charitable donation?
Unfortunately, the way this situation is structured you will most likely not be able to take the charitable deduction for the rent and any insurance paid on the storage unit. You can take deductions for direct contributions to a charitable organization (recognized by the IRS) or for "property for the use of" the charitable organization. However, to qualify for the "property for the use of" a charitable organization the property must be in a legally enforceable trust or similar legal arrangement (if your state has similar non-trust entities) for the use by the charitable organization. One might restructure the arrangement by paying the money directly to the organization and then having the organization pay for the unit. However, please note that if you also use the storage unit for your goods, and you decide to pay the charitable organization an amount directly to them and then they use the money to pay the rent. If you have goods in the unit then you can NOT deduct the entire amount you contribute to them. The IRS may still argue that you may not be able to deduct any of the money. This is because of a rule which states you must back out any benefit that you receive from the payment to the not-for-profit. One could argue that if your name is on the lease of the unit that you still have 100% use rights and therefore are technically giving up nothing. Others could argue that by giving up a percentage of space you are donating that space and therefore can deduct a pro rate portion of the money (only if you pay the charitable organization directly first and they pay the rent.) Best case scenario is if you are not using the unit at all, is to get your name off the lease of the unit and put the organization's name on it. Then pay the organization DIRECTLY, and let them pay the storage owner.
No you cannot deduct your expenses incurred from the storage unit as a charitable donation. You technically did not donate anything, but rather paid expenses for them. If you were to have owned the storage unit outright and gave it to the church, then you would have been able to deduct the fair market value of the property as a charitable contribution.
Unfortunately, the way this situation is structured you will most likely not be able to take the charitable deduction for the rent and any insurance paid on the storage unit. You can take deductions for direct contributions to a charitable organization (recognized by the IRS) or for "property for the use of" the charitable organization. However, to qualify for the "property for the use of" a charitable organization the property must be in a legally enforceable trust or similar legal arrangement (if your state has similar non-trust entities) for the use by the charitable organization. One might restructure the arrangement by paying the money directly to the organization and then having the organization pay for the unit. However, please note that if you also use the storage unit for your goods, and you decide to pay the charitable organization an amount directly to them and then they use the money to pay the rent. If you have goods in the unit then you can NOT deduct the entire amount you contribute to them. The IRS may still argue that you may not be able to deduct any of the money. This is because of a rule which states you must back out any benefit that you receive from the payment to the not-for-profit. One could argue that if your name is on the lease of the unit that you still have 100% use rights and therefore are technically giving up nothing. Others could argue that by giving up a percentage of space you are donating that space and therefore can deduct a pro rate portion of the money (only if you pay the charitable organization directly first and they pay the rent.) Best case scenario is if you are not using the unit at all, is to get your name off the lease of the unit and put the organization's name on it. Then pay the organization DIRECTLY, and let them pay the storage owner.