All this week I’ll be answering last-minute tax questions as part of Marketplace Money’s special report on tax season. This next question comes from Ira in Los Angeles, Calif.
We own a rental home, which we rent out for $1,500 per week. We donated that home to two different 501(c)(3) charities this year, so they could auction off a week for each. One person paid $250, one paid $650. Can we deduct the market value of a week’s rental for $1,500 from our taxes, or can we deduct the above mentioned total of $900 from our taxes, or can we not do either?
ANSWER: Not many tax questions can be answered in a single word but this one can — NEITHER! You have given what is called a partial interest in property and these amounts are not deductible as charitable contributions. IRS publication 526 has an example very similar to your question.
I suppose there is some good news here. You don’t have to claim the $3,000 for rent which you never received. Perhaps a small consolation but keep up your good support for these charitable organizations.
Frank Degen, EA is a self employed practitioner in Setauket (Long Island), New York. He has a Bachelors degree in mathematics from Iona College and a Masters degree from Johns Hopkins University. He became an Enrolled Agent in 1984. Degen, served a three-year term on the Internal Revenue Service Advisory Council (IRSAC) and was Chair in 2009.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
