We can accept almost any type of donated, noncash item for the purposes of a project and issue a receipt to the donor for the item, but there are some exceptions:
- The IRS does not consider time or services tax-deductible. This is mainly because it's difficult to determine the fair market value of both time and services, and we are therefore unable to offer a tax receipt for these kinds of donations
- Rented Property/Space
- Donations need to be considered "full interest" in order to be tax-deductible by the IRS, meaning that full ownership is donated to the recipient. Because ownership of rented spaces and loaned property remains with the donor, and they are not donating "full interest" in the donated item, these donations are not considered tax-deductible according to the IRS.
- Airline Tickets/Miles and Vehicles
- Because of complex restrictions placed by the IRS, Fractured Atlas is not able to process donations of these items in accordance with IRS regulations.
- Real Estate
- Donations of real estate can be very tricky for fiscal sponsors, so our lawyers have advised us against accepting them. Fractured Atlas would need to engage with a real estate attorney in the jurisdiction in which the property is located. This is an expense that would be passed along to the project, since it is not included in the fees that we assess to run the program. This would also be an expensive venture for the project. In addition to covering Fractured Atlas’s attorney fees, the project would pay the regular 8% fee to Fractured Atlas for processing the donation, which would be based on the value of the land. Furthermore, if Fractured Atlas incurs any expenses related to property tax issues, transfer tax issues, insurance, deed recording, review of mortgages and other covenants and obligations that are tied to the land, they would all be passed along to the fiscally-sponsored project. Finally, Fractured Atlas cannot ensure that the property will be used for charitable purposes once it has been granted to the fiscally-sponsored project. This is especially true if the project decided to sell the land at any point. The funds from the sale would need to be used for charitable purposes, but Fractured Atlas cannot provide the necessary oversight to ensure this will happen.
The IRS provides additional details about what it can and cannot consider tax-deductible in Publication 526.
Donations of intangible services (like pro-bono accounting/legal help or free rent of any kind) are considered IN-KIND donations by Fractured Atlas. These donations are very valuable but are not tax-deductible under the law. Therefore, we cannot issue a receipt for donations of pro-bono services or free space.
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