Similarly, the value of donated services are not deductible[1]. (If an accountant tells you they are, run away!)<div><br></div><div>The logic is that you can only deduct money you've actually spent. It actually makes sense if you think about it, because the landlord is getting an implicit deduction by giving you free rent. If they were renting to a for-profit, they would have to pay tax on that income. Since they don't have that income, they aren't paying taxes on it.</div>
<div><br></div><div>You could do as Lokkju suggests and write each other checks, but there would be no tax benefit for the landlord because the additional income would increase their taxes by the same amount the deduction would decrease it. However, such a transaction might be beneficial to the hackerspace for a few reasons:</div>
<div>* It would increase your "public support" which would help you keep public charity status</div><div>* If you have any grants that match your other contributions, it would make your other contributions higher.</div>
<div><div><br></div><div>[1] <a href="http://www.irs.gov/publications/p526/ar02.html#en_US_2010_publink1000229693">http://www.irs.gov/publications/p526/ar02.html#en_US_2010_publink1000229693</a></div><div><br></div><div>Happy hacking,</div>
<div>-Ed<br clear="all">--<br>Edward L. Platt<br>i3 Detroit: <a href="http://i3detroit.com">i3detroit.com</a><br>Cell: 248.320.5061<br><br><br>
<br><br><div class="gmail_quote">On Tue, Mar 8, 2011 at 11:52 AM, Lokkju Brennr <span dir="ltr"><<a href="mailto:lokkju@gmail.com">lokkju@gmail.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex;">
Right - but your landlord can legally make a cash donation to the<br>
charity for the rent amount each month, that you pay back to them as<br>
rent, as long as money actually changes hands, correct? i.e., they<br>
write you a check for tax-deductible contribution of $1000, you write<br>
them a check for rent of $1000, etc - or is your landlord prevented<br>
from making tax-deductible contributions?<br>
<br>
Loki<br>
<div><div></div><div class="h5"><br>
On Tue, Mar 8, 2011 at 8:39 AM, Jeff Cotten <<a href="mailto:omegix@gmail.com">omegix@gmail.com</a>> wrote:<br>
><br>
><br>
> Synopsis: Rent is not a tax-deductible benefit when donated to a 501c3<br>
> charity.<br>
><br>
> Thank you to MrFranceIsBacon from Makers Local 256 who brought this to our<br>
> attention.<br>
> One of the ideas that Makers Local (Huntsville, AL) had when we started was<br>
> to attain 501c3 charity status,<br>
> and then convince local building owners to let us set up there rent-free,<br>
> while they wrote the Fair Market Value (FMV) off<br>
> as a charitable donation on their taxes.<br>
><br>
> There are tax laws preventing this, it is considered Partial Interest in<br>
> Property.<br>
><br>
> Ref: Page 9, Example 1: <a href="http://www.irs.gov/pub/irs-pdf/p526.pdf" target="_blank">http://www.irs.gov/pub/irs-pdf/p526.pdf</a><br>
><br>
><br>
> I've added an entry on the wiki about this here:<br>
> <a href="http://hackerspaces.org/wiki/Finances#Tax_Laws" target="_blank">http://hackerspaces.org/wiki/Finances#Tax_Laws</a><br>
><br>
><br>
> Omegix<br>
> Makers Local 256<br>
><br>
><br>
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