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Bill is an electrician. The church he attends needs some electrical work done, and Bill volunteers to do it, without charge. He devotes 20 hours to the project, and asks the church treasurer for a charitable contribution receipt for his hourly rate multiplied times 20 hours. How should the treasurer respond?

Take the quiz first, then check the summary for all the details.

1. A church begins a remodeling project. Steve, a church member, donates 30 hours of labor toward the project. Steve is a carpenter who ordinarily receives $30 per hour for his services. Steve asks the church treasurer for a receipt showing a contribution of $900 (30 hours times $30 per hour). The church should issue Steve a letter of appreciation acknowledging the hours of labor that were donated, but it should clarify that this amount is not deductible.
   True or False
   
   
2. A church begins a remodeling project. Steve, a church member, performs 30 hours of labor during the project. Steve is a carpenter who ordinarily receives $30 per hour for his services. Steve asks the church to pay him for his services, and then he donates the payment back to the church in the form of a contribution. Steve will be entitled to a charitable contribution deduction.
   True or False
   
   
3. An attorney donates his time free of charge in representing a church. He is entitled to a charitable contribution deduction for the value of his donated services.
   True or False
   
   
4. A church member donates several hours each week working with a children's program in her church. As part of the program, she is required to wear a uniform. She is not entitled to a charitable contribution deduction for either her labor or the cost of the uniform worn during the performance of the donated labor.
   True or False
   
   
5. Several adult church members accompany the youth group on a short-term missions trip. The members may claim a charitable contribution deduction for expenses they incur on the trip that are not reimbursed by the church.
   True or False
   
   

It is common for church members to donate labor to their church. The donation may be hours spent teaching a Sunday School class or attending choir rehearsals. Or, it may be the performance of donated labor by an electrician, plumber, contractor, CPA, or attorney. In any of these cases, the church member may ask the church treasurer for a charitable contribution receipt acknowledging the donation of labor.

No deduction is allowed for a contribution of services. A church member who donates labor to his or her church may not deduct the value of the labor.

While the value of labor or services can never be deducted as a charitable contribution, it is important to note that un-reimbursed expenses incurred while performing donated labor for a church may constitute a deductible contribution. The income tax regulations specify:

Un-reimbursed expenditures made incident to the rendition of services to an organization contributions to which are deductible may constitute a deductible contribution. For example, the cost of a uniform without general utility which is required to be worn in performing donated services is deductible. Similarly, out-of-pocket transportation expenses necessarily incurred in performing donated services are deductible. Reasonable expenditures for meals and lodging necessarily incurred while away from home in the course of performing donated services are also deductible.

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