Use of an Asset for Charitable Purposes
Granting a charity permission to use or occupy property does not represent payment made to or for the use of the organization. Such an arrangement does not constitute a gift of property. It is merely the granting of a privilege for which no charge is made (Rev Rul 70-477). Thus, granting a charity the use of property does not constitute a charitable gift.
Example - Purchase of asset for charity - A taxpayer who buys an asset and uses it while performing volunteer services for a charity can't deduct its cost if he retains ownership of it. That's true even if the asset is used exclusively for charitable purposes. (McCollum, Charles, (1978) TC Memo 1978-435, PH TCM ¶78435, 37 CCH TCM 1817; PLR 8440082)
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Cost of Maintaining an Asset
A taxpayer may deduct the cost of maintaining a personally owned asset to the extent its use relates to providing services for a charity. Thus, for example, a taxpayer was allowed to deduct the fuel, maintenance and repair costs (but not depreciation or the fair rental value) of piloting his plane in connection with volunteer activities for the Civil Air Patrol. (Rev Rul 58-279, 1958-1 CB 145) Similarly, a taxpayer who participated in a mounted posse that was a civilian reserve unit of the county sheriff's office could deduct the cost of maintaining a horse (shoeing and stabling). (Hahn, Eugene, (1979) TC Memo 1979-429, PH TCM ¶79429, 39 CCH TCM 372)
Depreciation of Capital Assets
No deduction is allowed for the depreciation of a capital asset as a charitable deduction. This includes vehicles (that’s why there is no imputed depreciation in the mileage rate), computers, etc.
Example: Kathy volunteers as a member of the sheriff’s mounted search and rescue team. As part of volunteering, Kathy is required to provide a horse. Kathy is not allowed to deduct the cost of purchasing the horse and cannot depreciate her horse. She can, however, deduct uniforms, travel, and other out-of-pocket expenses associated with the volunteer work.
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