Scenario: You own a primarily rental home in the Florida Keys. You rent it all w

Question

Scenario: You own a primarily rental home in the Florida Keys. You rent it all winter season without any vacancies for $2500 per week. A local charity has asked you to offer the home for a silent charity auction. The home would be available for one week to the highest bidder with a starting bid of $2300.

Given you are forgoing the $2500 income for charity; you want to determine if that lost income can be considered a charitable deduction. This is a yes or no answer. Please include the tax law (in full) related to the answer. You are not required to write a summary memo or client letter.

Explanation / Answer

It should not be considered as a charitable deduction as under the income tax law, the income forgoing equivalent to $2500 is being replaced by the auction proceeds of $2300. So the person cannot claim a deduction under charity.

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