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Updated about 4 years ago,
- Real Estate Broker
- Cody, WY
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Need advice: Using a property for charity
Background: A woman owned a property with her primary residence, a guest house, and a warehouse. She used the warehouse to start a food distribution center in 1998. She passed away last year and the kids are only interested in selling the property and running off with the money. They don't care about maintaining her charity. I've been looking for a way to serve the community and this seems to be a perfect fit! I can purchase the property to ensure her legacy continues uninterrupted.
I would purchase the property for around $500,000 with $200,000 in cash and $300,000 financed. The two residential rentals would pay the mortage plus provide an additional $1,300+ per month. I would allow the food distribution center to use the warehouse at no charge.
My question: if the warehouse has a market value of $1,000 a month and I let them occupy for free, do I get to write off $12,000 a year in charitable contributions? This is strictly a charity and not a money-making scheme, but I want to confirm I'm not leaving money on the table by missing out on a tax deduction or other benefit.
If anyone has advice about a situation like this, I would love to hear from you. I have my CPA looking into this but she isn't an expert on investment property and deductions.
- Nathan Gesner