Is there a Tax man in the House! Question regarding charitble leases to Non-Profits.

[Anonymous]

I am going to run the local Rails to Trails Orginization in my area. We need ATVs to do trail maintance. Could the local Honda Dealer lease us the ATV at a Doller a season and deduct the fair market value of the lease (Say 200 a month) instead of selling it outright. If he can then this would also mean that CSX could lease a locomotive to a escursion not for profit RR at a nominal fee and then deduct the fair market value of the Lease[:)]

[jeaton]

From IRS Publication 526. "Partial interest in property. Generally, you cannot deduct a charitable contribution (not made by a transfer in trust) of less than your entire interest in property."

Short answer: No

[Anonymous]

So would happen if they donated the engines to us and then we sold it back to them for a doller at the end of the year.

[Anonymous]

QUOTE: Originally posted by Dunkirkeriestation

So would happen if they donated the engines to us and then we sold it back to them for a doller at the end of the year.

First off, CSX is very power short at the moment so the possibility of them donating you a locomotive is remote indeed.

Second, if they were to donate a locomotive that they owned to a IRC 501c (3) qualified non-profit group CSX could take a charitable deduction. If they bought the locomotive back for less than its full value, both CSX and the charitable organization would be in a great deal of hot water, having violated several different laws.

LC