Certainly one should take advice from one's own legal counsel.
That having been said, it may be that this may be complicated by details of a gift.
If transfer of the asset to the exempt organization is understood have taken place at its delivery at the organization's location, it seems most likely that the expenses to deliver the asset are the donor's expenses. The question then would be, as Isaac's CPA Journal article authors opine, whether the donor has provided a service to the organization as understood by the tax code, so that qualified expenses incurred by the donor providing that service would be deductible.
If, on the other hand, the property is understood to have been transferred to the exempt organization at the donor's location, that might change the analysis? Something like, "Your equestrian program is welcome to x tons of high-quality hay, but you have to pick it up at the farm." Or, perhaps, a donor with a valuable work of art who isn't willing to organize all of the arrangements, financial and physical, to transfer the artwork to the organization, who makes a similar requirement.
It may be the case that, the exempt organization having taken possession of the property, transporting it to the location of its choice is the responsibility of the organization. And then, perhaps, reimbursing the organization for an expense incurred by the organization might be a gift? I suppose that one would have to take into account the other aspects of the arrangement, like the organization perhaps being seen as providing something of value to the donor by relieving them of their responsibility to deliver their gift (especially with this worked out in advance, with the donor reimbursing the organization for delivering the property at the lower cost available to the organization!). But it might be an interesting analysis!
My US$0.02 worth; the usual disclaimers apply!
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Alan S. Hejnal (he/him)
Smithsonian Institution
Washington DC
hejnala@si.edu------------------------------
Original Message:
Sent: 05-01-2025 08:55 PM
From: John Taylor
Subject: Reimbursement of Shipping Costs
I found most of what we need in Publication 526. For contributions of property: "If you contribute property to a qualified organization, the amount of your charitable contribution is generally the FMV of the property at the time of the contribution." There's no reference to adding the shipping costs to that value.
"Out-of-pocket" expenses are also discussed in Section 526, and they apply only to the costs associated with that volunteer service. Not shipping gifts.
Further, 526 also states that "You can deduct your contributions only if you make them to a qualified organization." These shipping costs are not being paid to the charity.
Shipping costs might be deductible as a business expense if you are a company donating products to a charity. I did find several references to those expenses elsewhere.
I also quickly scanned 561 (Determining the Value of Donated Property) and didn't see anything that allows for deducting shipping costs as a charitable donation. However, I did find the statement on page 10 about not being able to deduct appraisal costs.
FWIW, there's no allowance for these costs in the instructions for Form 8283.
John
John H. Taylor, PrincipalJohn H. Taylor Consulting, LLC
2604 Sevier Street
Durham, NC 27705
919.816.5903 (cell/text)
Serving the Advancement Community Since 1987
Original Message:
Sent: 5/1/2025 8:43:00 PM
From: Isaac Shalev
Subject: RE: Reimbursement of Shipping Costs
John, can you cite chapter and verse on the issue of shipping not being deductible? I've gotten conflicting guidance repeatedly over the years. Here, for example, is guidance from CPA Journal that says:
"The authors believe that costs of shipping a collectible to a charity are deductible as a charitable contribution, as with out-of-pocket costs in connection with services to a charitable organization."
Isaac Shalev
Data Strategy Expert
(917) 859-0151
isaac@sage70.comAutocorrect was used in composting this email, please excuse any typos
Original Message:
Sent: 5/1/2025 4:13:00 PM
From: John Taylor
Subject: RE: Reimbursement of Shipping Costs
Shipping costs are normally the donor's responsibility and are NOT deductible. So I do not see how this scenario would play out anyway.
However, if you have an institutional POLICY that you ALWAYS pay these costs, a donor may certainly underwrite any of your costs.
John
John Taylor Principal, John H. Taylor Consulting, LLC 919.816.5903 Big ideas; small keyboard
Original Message:
Sent: 5/1/2025 4:06:00 PM
From: Meghan Hickey
Subject: Reimbursement of Shipping Costs
Hi all! I searched through a lot of questions about shipping costs on here, but I have a situation I think is somewhat unusual. My organization wishes to cover shipping costs for an in-kind gift so we can leverage our tax-exempt status for a better rate. The donor has offered to reimburse us for the cost of shipping after the fact. Would that payment from the donor be considered a donation in itself?
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Meghan Hickey
Rhode Island School of Design
mhickey@risd.edu
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