Originally Posted by atlanticacctg
Yes, they can deduct the fmv of the leased space.
It depends; according to the IRS, office space donations are called "in-kind donations". The IRS encourages in-kind donations by allowing biz to take a tax deduction for the FMV of the service. For office space, this is the FMV of a lease. To qualify for tax dedcution, the recipient must be a tax-exempt charitable organization or 501(c)(3). IRS rules DO NOT ALLOW donations for a portion of the owner's interest in a property. For example, if you own a multi-story building and allow a nonprofit to occupy one of the floors for free, you cannot take a deduction. The reasoning is that because you still own the building, you have lost no benefit of ownership.