Charitable Contribution?

[Joel]

I received an email from a client which included the following paragraph:

 

"I occasionally do summer volunteer work that requires the use of an RV as a place to live while working for the US Army Corps of Engineers, the US Forestry Service, and other such local, regional, state, and national public and governmental agencies.  My question to you is can my expenses be deducted as charitable contributions or any such things?  This includes deducting the interest on a loan for purchase if it would be advantageous to do so."

 

I know that charitable travel expenses are deductible if there is no significant element of personal pleasure, recreation, or vacation in the travel.

Also Qualified Charitable Organizations include federal, state and local governments, if gifts are solely for public purposes, including nonprofit volunteer fire departments, public parks facilities and civil defense organizations.

 

I think this qualifies but would appreciate other opinions.

 

[rfassett]

My gut reaction would be that if he donated it to the charitable organization and they let him stay in it while on-site (and anyone else that needed to stay in it) and it stays with the charitable organization, you might have an argument.  But if he takes it with him and it is his and his alone to do with what he wants, I might think you could use a % of it, but that, in my opinion, would still be a very big stretch. I would need to do some serious research to come up with a different answer.

[Gail in Virginia]

The interest on a loan might be deductible as mortgage interest on a second home.  The only expenses that would count as charitable, I would think , would be those incurred solely while he was performing the charity work.  For example, if he has to pay for waste disposal while living in the RV in a remote site, then maybe.  Property taxes?  I would think not because they are the cover the entire year whether he is using the RV or not.  But I have not done any research either - although I think that rfassett and I are on the same page with this.

[Margaret CPA in OH]

I think travel expenses, mileage, lot fees, etc. would also be deductible if the primary purpose was this charitable effort. See Pub. 526. While lodging expenses, under certain circumstances, are deductible, taking part deduction for the RV may fall under the prohibition to taking a deduction a partial interst in a property.

I wouldn't take it unless it was used solely and exclusively for charitable purposes which I doubt. I agree with Gail and Ron.

[Jack from Ohio]

I say NO charitable deduction.  The organizations mentioned are not 501(c )(3) organizations.  No direct donation of money or items are involved.

[Margaret CPA in OH]

Doh! Good point Jack. So contributions may be possible but not deductible as charitable in any event.

[Jack from Ohio]

Doh! Good point Jack. So contributions may be possible but not deductible as charitable in any event.

To be deductible, must be to a charitable organization, 501(c )(3) and you must have documentation from the recipient organization.

[rfassett]

Not so fast there mi amigo Jack:

 

From IRS.GOV

You may deduct a charitable contribution made to, or for the use of, any of the following organizations that otherwise are qualified under section 170(c ) of the Internal Revenue Code:

1. A state or United States possession (or political subdivision thereof), or the United States or the District of Columbia, if made exclusively for public purposes;
2. A community chest, corporation, trust, fund, or foundation, organized or created in the United States or its possessions, or under the laws of the United States, any state, the District of Columbia or any possession of the United States, and organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
3. A church, synagogue, or other religious organization;
4. A war veterans' organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
5. A nonprofit volunteer fire company;
6. A civil defense organization created under federal, state, or local law (this includes unreimbursed expenses of civil defense volunteers that are directly connected with and solely attributable to their volunteer services);
7. A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
8. A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

 

Not saying the present case is deductible - but not not deductible because it does not involve a 501(c )(3).  (PS - I love double negatives.)

[Joel]

I say NO charitable deduction.  The organizations mentioned are not 501(c )(3) organizations.  No direct donation of money or items are involved.

Jack,

Pub 526 has a list of types of qualified Organizations and #5 is as follows:

 

"The United States or any state, the District of Columbia, a U.S. possession (including Puerto Rico), a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions. (Your contribution to this type of organization is deductible only if it is to be used solely for public purposes.)"

 

I would say that the U.S. Army Corps of Engineers is for public purposes and is part of the US Govt.  Therefor qualifies.

[Joel]

If we can determine that the organizations are qualified organizations, then the expenses would be deductible as follows:

 

"Car expenses. You can deduct as a charitable contribution any unreimbursed out­of­pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization. You cannot deduct general repair and maintenance expenses, depreciation, registration fees, or the costs of tires or insurance. If you do not want to deduct your actual expenses, you can use a standard mileage rate of 14 cents a mile to figure your contribution. You can deduct parking fees and tolls whether you use your actual expenses or the standard mileage rate. You must keep reliable written records of your car expenses. For more information, see Car expenses under Records To Keep, later. Travel. Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses."

 

I agree that the interest expense for purchasing the RV would not qualify for a charitable deduction but might qualify as a second home mortgage deduction.

[Joel]

So, I guess the question is, Is the various agencies that he volunteers for sub units of the US Government or state/local governments?

[rfassett]

Methinks you are really pushing the envelope here, Joel.  I do not think the verbiage envisions somebody writing off their RV for travel expenses as much as it envisions paying the going rate for short term stay in a local hotel.  I don't know. You raise an interesting question.  The underlying regs and committee notes from whence these rules come might lend some guidance.  I think it will come down to how much audit risk you want to put your client under.  And will your logic stand up under audit.  I will be interested in hearing how you ultimately decide to ride this one.  Pending upon how you run with it, I might have to go buy an RV to drive to Church.

[BulldogTom]

I think the mileage to and from is deductible charitable mileage at 14 cents a mile.   Might pay for 1/2 of the cost of the gas. 

 

Everything else I would pass on.

 

Just my 2 cents.

 

Tom

Newark,  Ca

[jklcpa]

I agree with Tom, or I might not even take the mileage. I've run into campsite park "attendants" that were doing this in the summer months. The last was a retired couple that did this as their vacation during the months of nicer weather when this little park was open. They'd drive their RV to the campground, park it there for free in exchange for acting as the attendant for park that didn't otherwise have staff and needed someone onsite to answer questions and collect the fees.

[Abby Normal]

http://apps.irs.gov/app/eos/mainSearch.do

[Jack from Ohio]

I think the mileage to and from is deductible charitable mileage at 14 cents a mile.   Might pay for 1/2 of the cost of the gas. 

 

Everything else I would pass on.

 

Just my 2 cents.

 

Tom

Newark,  Ca

I totally agree.  Anything else would not stand at audit.

[Joel]

Thanks for all your comments and opinions.