J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

14.10 Interests in Real Estate

No deduction is allowed for the rental value of property you allow a charity to use free of charge. This is the case even if the property is used directly in furtherance of the organization’s charitable purpose; see the Example below.

If you donate an undivided fractional part of your entire interest, a deduction will be allowed for the fair market value of the proportionate interest donated.

A donation of an option is not deductible until the year the option to buy the property is exercised.

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Caution

Donating Vacation Home Use Not Advisable

To raise funds, a charitable organization may ask contributors who own vacation homes to donate use of the property, which the charity then auctions off to the public. Be warned that if you offer your home in this way you will not only be denied a charitable deduction for your generosity, but you may jeopardize your deduction for rental expenses. A deduction is not allowed for giving a charity the free use of your property. See the Example on this page.

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EXAMPLE

To help a charity raise money, one owner allowed the charity to auction off a week’s stay in his vacation home, and the highest bidder paid the charity a fair rental. The IRS ruled that not only was the owner’s donation not deductible, but the one week stay by the bidder was considered personal use by the ...