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Kaio 03-25-2009 12:07 PM

Can donation of professional services count as a tax write-off?
Here's the deal: I've recently entered into an arrangement where I photograph events for a local community center. In exchange, I get stuff for my portfolio, community warm-fuzzies, and "co-op dollars". Basically, co-op dollars are accrued at the rate of $10 an hour, and can then be applied for discounts to some (but not all) events held at the center.

The co-op dollars are a nice fringe benefit, but were I charging for my time it's less than a tenth of what I'd normally charge for professional photography services. Aside from the fact that there's no exchange of real money, I'm running this like a normal business arrangement: event participants are requested to sign a release form (or wear an armband if they don't, so I don't photograph them), and I have a signed contract with the director of the community center which spells out the terms of the copyright license I'm granting them for use of the photos.

Does this count as a charitable donation for tax purposes? I don't have much experience in this as I never have disposable income to donate, and I'm not sure if what amounts to volunteering counts. Also, if it does count, do I value it at my normal hourly fee, or my fee less the $10 an hour I get in co-op dollars (which I may or may not ever use)?


anson2995 03-25-2009 12:43 PM

You can't take a deduction for a donation of your time and/or services, but you might be able to deduct some expenses. I can't find an online link other than this PDF of IRS Pubication 526, but on page 5 it says:

Although you cannot deduct the value of your services given to a qualified organization, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be:
Directly connected with the services,
Expenses you had only because of the services you gave, and
Not personal, living, or family expenses.

Table 2 contains questions and answers that apply to some individuals who volunteer their services.
And if you receive something in exchange, like the co-op dollars, you have to subtract them out. (Or refuse to accept them.)

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