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From the June 28, 2019, issue of Kiplinger Tax Letter:
Think twice before donating to charity the right to use your vacation home. Charities such as schools and churches often use such places as prizes for dinners, galas or auctions that they sponsor to raise funds for their activities. You don’t get a charitable write-off because you gave only a partial interest in the property. Nor is there any deduction for the winning bidder, unless that person paid more for his or her winning bid than what the vacation home prize is worth. And be wary of this tax trap if you also rent out the vacation property: The time used by the winning bidder counts as personal use by you for purposes of the rule that prohibits the deduction of rental realty losses when the owner’s personal use tops the greater of 14 days or 10% of days rented.
Churches - Dinners - Auctions - Members - Use
Churches often organize fundraising dinners and silent auctions where members offer the use of their vacation properties as items for auction bids or prizes. Kiplinger’s caution is an important reminder for leaders who solicit these types of donations. They need to tell donors they cannot write-off these noncash gifts as income tax deductions.
CPA Kaylyn Varnum with Batts, Morrison, Wales & Lee, a national CPA firm serving nonprofits and churches, provides further details in a Church Law & Tax...
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