Is loaning a real estate to a qualified non profit organization tax deductible?

[kepco]

Hi

We have loaned a real estate ( a .45 acre lot) to a qualified non profit organization who uses them as  a community garden. The market value of the rent on the real estate is $3000/month, which I am not collecting from them. Is there any tax deduction that I can claim?  Can you refer an IRS document page number in this context that can help clarify the answer?

Thx

[tagteam · Accepted solution]

See https://www.irs.gov/publications/p526#en_US_2022_publink1000229721

Partial Interest in Property

Generally, you can't deduct a charitable contribution of less than your entire interest in property.

Right to use property.

A contribution of the right to use property is a contribution of less than your entire interest in that property and isn't deductible.

Example 1.

You own a 10-story office building and donate rent-free use of the top floor to a qualified organization. Because you still own the building, you have contributed a partial interest in the property and can't take a deduction for the contribution.

[Opus 17]

You tax break, if you want to call it that, is that you aren't reporting income, so you don't pay tax on the non-income.  You can never take a tax deduction for the temporary use of your property. 

[kepco]

Thanks for the response.

The non profit is a community garden where volunteers grow food and provide educational seminars and workshops to the community. Where 800 students from the community attended last year learning gardening, bee keeping, recycling etc. Can we claim the following from publication 526?

Conservation purposes. Your contribution must be made only for one of the following conservation purposes.
•Preserving land areas for outdoor recreation by, or for the education of, the general public.

[Opus 17]

@kepco 

A preservation easement is a permanent surrendering of property rights. You give up the right to use your property in a certain way forever, even though you may still own the property. In that case, the lost value can be taken as a tax deduction.  You have not indicated that you are permanently surrendering your right to use the property, and a temporary loan of the property is not deductible.