How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Barbara Your Own Question
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3219
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
71603090
Type Your Tax Question Here...
Barbara is online now
A new question is answered every 9 seconds

I have a owner who has a HUD contract that provides subsidy

Customer Question

I have a owner who has a HUD contract that provides subsidy to the apartment at his property. He is converting his property from affordable to conventional and HUD will allow him to transfer the amount of his contract and the amount of it to another apartment owner. He wants to transfer this to an non-profit and asked me if he could do that as a donation and get a donation receipt for the contract? If he can how do we determine the value..
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: I don't think so. This is a new question to me.
Submitted: 7 months ago.
Category: Tax
Expert:  Barbara replied 7 months ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

I would have to agree with you.

If the goal is a legitimate tax deduction, then you must be giving to a qualified organization. Also, you cannot deduct contributions made to specific individuals, political organizations and candidates. See IRS Publication 526, Charitable Contributions, for rules on what constitutes a qualified organization.

https://www.irs.gov/uac/eight-tips-for-deducting-charitable-contributions

https://www.irs.gov/pub/irs-pdf/p526.pdf

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Customer: replied 7 months ago.
Are contracts for a specific payment that are donated to a qualified organization considered something the IRS will recognize as a donation? How would he determine the value of the donation? Can you donate a contract that makes payments to the organization and deducte it as a charitable donation?
Expert:  Barbara replied 7 months ago.

The contributions must be made to a qualified organization and not set aside for use by a specific person.

Expert:  Barbara replied 7 months ago.

Just following up with you to see if you have any other questions or require further clarification on this topic. If so, please let me know, and I will be happy to assist you further.

Best regards,

Barb

Customer: replied 7 months ago.
That does not answer what I have been asking about both times. I know it has to be made to a qualified organization. I was asking about what is being donated.
thank you.
Expert:  Barbara replied 7 months ago.

I apologize if I was not clear in my response.

The item you are referring to (assignment of HUD contract) to a qualified organization is not a charitable donation.

Best regards,

Barb