Can You Write Off Free Rental to Charity on Your Taxes?

To promote the giving of property and services to certain nonprofit organizations, the Internal Revenue Service permits taxpayers to deduct a portion, and in some cases all, of the expense of the donation or fair market value of the property. To understand whether a taxpayer can write off a rental to charity, you must first understand what type of charity will qualify you for the deduction and what types of contributions are deductible.

To promote the giving of property and services to certain nonprofit organizations, the Internal Revenue Service permits taxpayers to deduct a portion, and in some cases all, of the expense of the donation or fair market value of the property. To understand whether a taxpayer can write off a rental to charity, you must first understand what type of charity will qualify you for the deduction and what types of contributions are deductible.

Qualified Organizations

Your gifts only qualify for a charitable contribution deduction if you make it to a certain type of organization. The IRS limits this type of organization to those that operate to support religious, charitable, scientific, educational and literary purposes. It also includes war veteran groups, organizations that prevent cruelty to animals or children, fraternal societies, and in some cases, groups that support national or international amateur sports competitions. If you make a charitable contribution to any other type of organization, such as a lobbyist groups or for-profit organizations, the IRS will not permit you to take a tax deduction.

Deductible Contributions

In general, your contribution must be property, not services, including cash, to be deductible. The amount you may deduct cannot exceed the value that the charity receives from the gift, either. Contributions that the IRS permits you to write off as a tax deduction include tickets to athletic events that benefit a university; membership fees or dues; nonreimbursed expenses while volunteering; tickets to a charity event; expenses for a student living with you per an agreement with a nonprofit organization; and gifts of property or cash.

Nondeductible Contributions

There are contributions that you make to qualified organizations that the IRS will not permit you to deduct or write off. These include the amount of a contribution from which you benefit; personal expenses that do not benefit the organization; the value of your time or service; a qualified distribution from an Individual Retirement Account (IRA); partial interest in a property; appraisal fees; and contributions that you make to a fund that allows you to designate how the money is spent or distributed. You can only deduct clothing or household items that you donate if they are in good condition or better, or the total of all exceeds $500 and you include an appraisal.

Writing Off Rentals

Rentals constitute a right to use property. Since you are not donating your entire interest in the property, but merely a portion, you cannot claim a tax deduction for the amount of the rental. If you instead donated the entire property to the qualified nonprofit organization, the IRS would permit you to write off the fair market value of the property.

References

About the Author

Christine Aldridge is a financial planner who has been writing articles related to personal finance since 2011. She has bachelor's degrees in political science from North Carolina State University and in accounting from University of Phoenix. Aldridge is completing her Certified Financial Planner designation via New York University.