Today TaxMama hears from Tomika in North Carolina who wants to know. “Can a for profit company receive a tax deduction for donating a website to a school? The only in-kind contributions I found were listed as a disclaimer on the non profit books. Would the website be considered as a non deductible donation for services rendered?”
We had a interesting discussion about this many, many years ago.
Yes, the business can take a charitable contribution deduction – if the school is a qualified non-profit organization. If this is a public school, you’d have to check, to make sure, if the donation is deductible.
But the real question is – what is the value of the website being donated? If it’s a brand-new website with no traffic and no history, it’s probably not worth more than the cost of the domain and the fee paid to the designer – or to the staff member who’s doing the designing.
On the other hand, the staff person’s wages are already being deducted by the business, so why bother converting it to a contribution? That just puts limits on the deduction.
As to the owner’s services – there really is no deduction for donating services to charities – regardless of how much your time is worth.
However, suppose the company keeps the website and lets the school use it until it has history, a large membership base and some serious value… At that time, find an appraiser (not that easy to do – or cheap) who can put a substantial value on the website. Then make the donation.
That could generate a donation of real value.
And remember, you can find answers to all kinds of questions about donation strategy and other tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]
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