Beware Tax Rules When Donating Stays at Your Vacation Home: Kiplinger Tax Letter

You may not get a charitable write-off, and it may count as personal use by you.

picture of a vacation home in the mountains
(Image credit: Getty Images)

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Think twice before donating the right to use your vacation home to charity. Charities such as schools and churches often use such places as prizes for dinners, galas or auctions that they sponsor to raise funds for their activities.

You don’t get a charitable write-off for donating the right to use your vacation home because you gave only a partial interest in the property. 

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Nor is there any tax deduction for the winning bidder, unless the person paid more for his or her winning bid than what the vacation home prize is worth, and in that case, the bidder can deduct only the excess amount paid.

And if you also rent out the property to others, the time used by the winning bidder counts as personal use for purposes of the rule that bars deducting rental losses when the owner’s personal use tops the greater of 14 days or 10% of days rented.

This first appeared in The Kiplinger Tax Letter. It helps you navigate the complex world of tax by keeping you up-to-date on new and pending changes in tax laws, providing tips to lower your business taxes and personal taxes, and forecasting what the White House and Congress might do with taxes. Get a free issue of The Kiplinger Tax Letter or subscribe. 

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Joy Taylor
Editor, The Kiplinger Tax Letter

Joy is an experienced CPA and tax attorney with an L.L.M. in Taxation from New York University School of Law. After many years working for big law and accounting firms, Joy saw the light and now puts her education, legal experience and in-depth knowledge of federal tax law to use writing for Kiplinger. She writes and edits The Kiplinger Tax Letter and contributes federal tax and retirement stories to and Kiplinger’s Retirement Report. Her articles have been picked up by the Washington Post and other media outlets. Joy has also appeared as a tax expert in newspapers, on television and on radio discussing federal tax developments.