Free Rent For Non-profit Organization?

[Elwood]

I was reading one of your other answers about "bargain-rent" and I have a similar question. I just started a non-profit in Oregon, and I am wondering if I can solicit "free rent" from an individual or business. Would they be able to write-off the fair-market value of the unit? Or do I have to pay rent and then they turn around and donate to the non-profit. More work, less likely to have that end happily. Thank you.

[spengler]

See IRS Publication 526 "Charitable Donations" which is available

at www.irs.gov/pub/irs-pdf/p526.pdf

on page 9 the IRS writes about "partial interests" under

the heading "Partial Interest in Property" which means that

donations of use are not deductible. Even if the landlord gives

space for free to use the landlord does not receive a charitable

deduction.

As for your proposal that you pay rent and the landlord later donates to your 501(c)(3) organization.  That is certainly possible, but, if the landlord wants a charitable deduction, the donation would need to be voluntary. On page 2 of that Publication 526 that IRS has written, "A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value." Harvey Mechanic, Attorney at Law - [email protected]

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.