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Old 02-12-2010, 12:27 AM
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Exclamation commercial real estate for non-profit

Hi

I am working for a non-profit organization and we were wanting to try and get some office space rented to us either as a donation/free or way below market value while it is vacant (until someone else wants to lease it). We have the owner of a property interested, but he is wanting a tax deduction for the deal. I was hoping you could point me to a tax deduction that he could get for donating the property for a short time period (~6months) or renting it to us at below market value. The owner's accountant has said that there isn't a tax deduction for that, but we have had other people tell us that there is. Please let me know whether or not there is a tax deduction that he can claim for this (anything please!) and where it can be found in IRS publications. Thanks



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Old 02-12-2010, 10:57 AM
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Well, the only way the owner can get a tax deduction is if he charges you rent, and then takes the money collected and donates that to the charity of his or her choice!

I agree with the owners accountant that if the landlord is charging rent at below fair market value, then, that in itself will not enable the landlord to claim a charitable tax deduction. There is no avenue available in the IRS tax code that allows the landlord to succeed in obtaining a charitable tax deduction for charging rent a below fair market value to a non profit organization.

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