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I am going to write a computer program for my church to help manage its business affairs. How do I go about valuing the ìone of a kindî program when claiming a charitable deduction? - The Good Soul, Provo, Utah.

I am sorry to report that you probably will not be able to claim ANY significant deduction. Why not? The tax law has a quirk in the charitable giving sections that prohibits a deduction for the contribution of an item that would produce ordinary income if sold. So, if you sold the program you are going to write rather than donating it, the money you received from the sale would be ordinary income to you. So, a gift to charity of the program will not be deductible.

What you would be able to deduct from this exercise are your out-of-pocket expenses incurred in creating the program, such as the cost of disks and paper for reports. How about your time in working on the program? Sorry, that value is not deductible as a charitable contribution, either.

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