Can my landlord get a tax deduction for the free rent he gives us?

I have a few questions for you about a tax deduction for our “landlord.” We just received 501(c)(3) tax exempt status form the IRS. Does this mean that our landlord can claim a deduction the reduced rent she gave us?  RW

 

Dear RW,

Donations of cash or physical goods to your organization are tax deductible charitable donations.  But donations of services or use of leased property is not a tax deduction.

If your landlord gave your homeschool organization free or reduced rent, that is not a tax deductible donation for the landlord. Sorry.

Here are some articles that explain the IRS rules on donating leased space.
Can landlords take a tax-deduction for the donation of leased space?

When a property owner transfers title to a charity of all or part of real property, the owner can generally take a tax deduction for the gift.  However, offering a charity leased space for free or at a reduced rate is a not a gift of an ownership interest and is not considered deductible by the IRS.

Landlords do a good deed by donating leased space to a charity but they are not permitted to receive a tax benefit for their action.

Tax treatment of the provision of rent free

For this reason, donations of services or loans of property to a charity do not qualify as gifts because they do not transfer a property interest to the charity. They simply allow the charity to use the property of the donor, or to benefit from the donor’s services, free of charge.

Here’s the official word from the IRS from Revenue Ruling 70-477.

“a contribution, made after July 31, 1969, to a charitable organization of the right to use property is treated as a contribution of less than the entire interest in the property and does not give rise to a deduction.”

In other words, if someone donates a building (i.e. “the entire interest in the property” ) to a charity, it is a tax deductible donation. But if the contribution is the right to use the property, then there is no tax deductible donation.

Carol Topp, CPA

Will you be at TTD-Nashville? I could use your help!

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Will you be at the Teach Them Diligently Homeschool conference in Nashville March 30-April 1, 2017?
I’ll be there! Come by my booth and say hello.
I could use some help manning my booth while I speak and I pay well!
Carol Topp, the HomeschoolCPA, is needing some booth helpers during the TTD-Nashville conference March 30-April 1.
I need a booth helper during 3 time slots of about 2 hours each around my speaking times on Friday and Saturday. I just need someone to be at my booth while I speak. If you are familiar with my HomeschoolCPA or Micro Business for Teens books that would be a big help. Even better if you can make a sale using a Square device on an iPhone. I’ll show you how!
I will gladly offer you a $25 gift card for each 2-hour shift, reimburse your parking, and pay for your meal.

 

If you can help me for a 2-hour shift on Friday (2:30-4:30 pm) or Saturday (8:30 am-10:30am and 4:30-6:30 pm) please contact me at Carol@HomeschoolCPA.com.
Please share this with your friends and homeschool group members.

Time is precious

Time is precious. I value my time and I hope you, my clients and potential clients, value it as well.

For many years I have kept my rates very low; typically less than half what an experienced CPA would charge. I have usually not charged to read and reply to emails.

But now I have found my services more in demand and my time even more precious.

So, I will be raising my rates to $75/hour to nonprofit clients and $100 to for-profit businesses. I will be charging a rate of $50/hour for reading and replying to emails (minimum $25).

These rates are still less than what most CPAs with 17 years of experience charge (typical rates are $150-$200+ per hour).

My heart is still to help small nonprofits and homeschool organizations. I will still provide personal, professional, and experienced services to my clients.

Carol Topp, CPA

HomeschoolCPA needs help and is hiring (please share!)

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Do you have an accounting background and want to help homeschoolers?

I’m Carol Topp, CPA, the HomeschoolCPA, and I’m looking to hire someone to help me.


This is a great opportunity for a homeschooling parent with an accounting background. It’s flexible, home-based, and very rewarding!


Description:

I’m looking for a subcontractor who will prepare IRS Forms 1023 and 990/990-EZ for my homeschool nonprofit clients. The completed forms will be submitted to me for review and signature. You will be an independent contractor, not an employee of Carol Topp, CPA, LLC.

You will work remotely from your home/office and chose your work hours. The hours are flexible and could be sporadic. There should not be any rush jobs. You should have several weeks to get the forms prepared, but there will be deadlines.

You will not be responsible for recruiting clients or corresponding with clients, but you are expected to keep client information confidential.

Duties:

  • Prepare IRS Form 1023 Application for Tax Exempt Status
  • Prepare Form 990, 990-EZ Annual Information Returns for Tax Exempt Organizations
  • Correspond with Carol Topp on a regular basis on the progress, data needed from the client, and questions you have.
  • Become familiar with IRS and state nonprofit filing forms. This may mean taking classes on preparing these forms. These classes are your responsibility.
  • Comply with federal, state, nonprofit filing requirements by studying existing and new regulations.

Qualifications:

  • Education (Bachelors degree from four-year college or university) and experience in accounting. CPA designation strongly preferred.
  • Familiarity with IRS Form 1023 and 990/990-EZ either through experience or through education.
  • Homeschooling experience desired.
  • Ability to work independently.
  • Attention to detail, deadline-oriented, confidentiality, time management

Compensation:

Compensation will be 50% of my fee charged to my client. The fee can be negotiated after a trial period based on experience and successful completion of preparing Forms 1023 and 990/9990-EZ in a timely and correct manner. Subcontractor will be paid when final form is delivered to Carol Topp, CPA.

Please share this information with everyone in your local homeschool group, though social networks, email and with your friends who you think might be interested.

If you’re qualified and interested in helping me, email me some information about yourself, your education and experience to Carol@HomeschoolCPA.com. We’ll set up a phone interview and discuss the job responsibilities.

 

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Thanks,

Carol Topp, CPA

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Time off needed. HomeschoolCPA thanks you for your patience.

 

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Dear readers,

I will not be able to reply to your emails or posts here as quickly as I would like. I need to take a week or two off of work to help my 25 year old daughter who broke her leg this past weekend.

She cannot do much in her own. She needs help from two people to get into and out of bed, get to the bathroom,eat, etc. She is not to be left alone. I’m grateful that I work from home and that frequently my husband can work from home as well.

I’m also grateful that her accident (she slipped down a steep hill) happened one week after she moved back to Cincinnati, so we can take care of her.

Please pray for her pain to lessen and her healing to be quick.

Thank you for your patience.

Carol Topp, CPA
homeschoolCPA.com

Homeschool CPA, Carol Topp returning to work part time

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Dear friends, clients, and visitors,

I thank you all for your patience and your prayers for me during my surgery and recuperation. The surgery went well and the surgeons are pleased. If you’re curious what I had done, read more here: http://homeschoolcpa.com/previvor/

The recuperation is taking longer than I expected. I returned to part time work on January 5, 2016, but I can only sit at my computer for a few hours before I need a rest.

I may not reply to you emails in as timely manner as I would like, so please be patient.

I hope to return to full time work in February, Lord willing.

Thank you for your patience as I continue progressing (and resting) toward a full recovery.

 

Carol Topp, CPA

Carol Topp, the HomeschoolCPA, is unavailable until January 2016

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Dear homeschool leaders,

I value and love working with each of you, but I will be unavailable from November 15, 2015 until January 4, 2016. I am having some preventive surgery that involves a long recuperation time.

I will not be able to reply to your email or schedule phone consultations for several weeks.

I may to be able to offer limited replies to emails beginning mid December 2015 and hope to return to work part time by January 4, 2016, Lord willing.

If you need help while I am unavailable, please:

  • Search my blog. Go to HomeschoolCPA blog and enter a search topic in the search box on the right-hand column.Searchblog
  • Visit my FAQ page
  • Read the Articles I’ve written for homeschool leaders.
  • Read one of my books.
    • The IRS and Your Homeschool Organization.
    • Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out
    • Money Management in a Homeschool Organization
  • Listen to my podcast. I have several podcast episodes on topics that homeschool leaders frequently ask me.
  • Contact your state homeschool organization. They may be able to answer your questions.
  • Be patient. I will reply to your emails as soon as I can, but it may be several weeks.

Thank you for your patience and allowing me this extended period of recuperation.

Prayers for my surgery on November 20, 2015 and recovery are appreciated!

carol-thumnail

 

 

 

Carol Topp, CPA

Does your homeschool group publish curriculum? Nonprofits and copyrights webinar

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Has your homeschool group considered creating and selling its own curriculum?
Do you know what you need to know about trademarks and copyrights?

 

This webinar on copyrights for nonprofits might be interesting and helpful to you.
I’ll be attending and already submitted a question about copyright ownership by a nonprofit.

 

Ask the Nonprofit Lawyer: Everything You Wanted to Know about Nonprofit Copyrights and Trademarks

Register here (free)

Date: November 5, 2015
Time: 2 p.m. ET

In this Q&A-driven webinar, you’ll have the opportunity to submit your own questions to one of the nation’s leading nonprofit attorneys from the Venable law firm as he walks you through the essentials, highlights common traps and pitfalls, discusses best practices in the nonprofit community, and most importantly, gives you the thoughtful, practical, real-life guidance and tips that you need to know in order to protect your nonprofit in the U.S. and overseas, as well as optimize and capitalize on your nonprofit’s intellectual property.

This webinar is geared toward all nonprofits, probably very large organizations, not specifically homeschool organizations.  Some of the information may not apply to your organization, but if you publish curriculum or have questions about trademarks and copyrights, you might learn a lot!
Carol Topp, CPA

Is my homeschool group considered a school?

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Hi Carol,
I took a look at the 1023-EZ worksheet to see if we qualify for filing as a tax exempt organization. Question #11 asks if we are an educational facility. Then it goes on to define what they mean. I do not know how our organization would not fall into that category. Our goal is to support homeschooling families by providing weekly classes for middle and high school students. We do make it clear that our tutors are working alongside parents. Parents have the final decision on the grade their student will receive for the class. So, what do you think? Does that mean we do not qualify to apply for tax exempt status?

Virginia

 

Virginia,
Form 1023-EZ Eligibility Checklist Question #11 asks if your origination is a school, college or university described in section 170(b)(1)(a)(ii). That part of the Internal Revenue Code describes a school. I do not consider homeschool programs to be a school as the IRS defines “school.”

One aspect of a school is a “regular faculty,” which the IRS defines as

“qualified teachers instruct the students, and the same teachers do so on a recurrent basis.”

Source: Internal Revenue Manual  viewed http://www.irs.gov/irm/part7/irm_07-026-002.html#d0e549 on 5/11/15.

And by “qualified” the IRS means:

“certifications by the appropriate state authority or successful completion of required training.”

Source: Instructions for Form 1023

So when you look beyond the Eligibility Checklist into the guts of the IRS code, you’ll probably agree with me that homeschool organizations are not schools because they do not have regular, “qualified” faculty. Most of the teachers in your homeschool organization may be qualified to teach a class at your homeschool co-op, but are not state certified, nor trained as teachers.

Your homeschool organization (probably) qualifies to be a 501(c)(3) tax exempt organization as an educational organization, but not as a school.

I hope that helps!

Carol Topp, CPA

Teaching Teenagers and Recent Grads About Money (podcast)

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My latest podcast episode is part 2 of a presentation on how to teach kids about managing money. I explain the important lessons to teach high school students and young adults.

Listen here.

This Handout lists helpful resources for teaching teenagers about managing money.

 

This is part 2 of a two-part presentation. Listen to Part 1 .

You might be interested in my 4-part podcast series in teaching kids about money:

Episode 7: Teach Preschoolers About Money

Episode 8: Teach Kids About Money

Episode 9: Teach Pre-Teens About Money

Episode 10: Teach Teenagers About Money

 

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My newest book Career Exploration for Homeschool High School Students is available in print and ebook format. Learn more.