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  • 1.  Office Space

    Posted 06-27-2023 04:37 PM

    Hello,

    A company wants to let our nonprofit use their office space for a few meetings and events throughout the year. My understanding is that this is not tax deductible for the company, but should we still issue some kind of acknowledgement or receipt recognizing that they are giving us the space?

    Thank you!
    Annie



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    Anne Pires
    Year Up
    apires@yearup.org
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  • 2.  RE: Office Space

    Posted 06-27-2023 04:59 PM
    You are correct. The use of the space represents a non-deductible partial interest transaction. See IRS Publication 526.

    It would be a good donor relations tactic to thank the donor. But you should not mention anything that would lead the donor to think they could claim a donation. You could say something like, While not a tax-deductible donation, we are truly grateful for your permitting us to use your office space.

    John

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



    Original Message


  • 3.  RE: Office Space

    Posted 06-28-2023 07:51 AM

    Thanks John! Would we be able to provide them with a tax receipt for utilities and services like cleaning or security if they broke out the costs of those?



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    Anne Pires
    Year Up
    apires@yearup.org
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    Original Message


  • 4.  RE: Office Space

    Posted 06-28-2023 07:54 AM
    No.

    John H. Taylor 
    919.816.5903 (Cell/Text)

    Big Ideas; Small Keyboard



    Original Message


  • 5.  RE: Office Space

    Posted 06-28-2023 08:31 AM

    To elaborate slightly on John's answer, I find it helpful to recall that the tax code identifies charitable contributions, first and foremost, as transfers of cash or of property other than cash.  So one of the analytical questions that I would ask would be "did any entity transfer cash or property other than cash to my institution?"  In the current scenario, I can't identify any property that was transferred to the institution.

     

    There are scenarios where the analysis is less transparent, such as where a donor directly pays some expense which the charitable institution has incurred and for which it would otherwise be liable, but, in general, attempting to identify whether any cash or other property was transferred to the institution is a good clarifying question.

     

    My US$0.02 worth; the usual disclaimers apply.

     

    Good luck!

    Alan

     

    Alan S. Hejnal (he/him)

    Data Quality Manager

     

    SNAGHTML5cbfa34

     




    Original Message


  • 6.  RE: Office Space

    Posted 06-28-2023 12:04 PM
    There are some opportunities, where there are direct costs to the nonprofit charged by a vendor they have chosen without undue influence from the donor, where a donor can be receipted for paying a debt on behalf of a nonprofit. However, in the case where the donor is the landlord, and costs like security are allocated rather than direct, and the vendors are chosen by the landlord, the landlord is not paying a debt, they are providing a service, and that is generally not tax deductible. 

    Your gratitude, on the other hand, is not constrained by the tax code, and you can certainly write a  thank you letter saying something like "though the IRS does not allow tax deductions for these contributions, your generosity has saved our organization more than $XXXX." Just be sure you're clearly saying it's not a tax receipt.


    Thank you,
    Isaac Shalev
    Data Strategy Expert
    Sage70, Inc.
    (917) 859-0151
    isaac@sage70.com

    Schedule a 30-minute consultation now:





    Original Message


  • 7.  RE: Office Space

    Posted 06-28-2023 03:47 PM

    Thank you!



    ------------------------------
    Anne Pires
    Year Up
    apires@yearup.org
    ------------------------------

    Original Message


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