In General Counsel Memorandum (GCM) 36418, the IRS states that, “no charitable contributions deduction is allowed for the fair market value of blood furnished to certain charitable organizations because the furnishing of blood is analogous to the rendering of a nondeductible personal service by the donor rather than a contribution of property (under Rev Rul 162)”. GCM 36418 denied the donation of milk as a charitable deduction based on this reasoning. Donation of the milk and the blood were considered as rendering a service rather than donation of services. No deduction is allowable under section 170 for a contribution of services. However, unreimbursed expenses incidental to performance of the service are deductible. In LARY, JR. v. U.S., 57 AFTR 2d 86-1377, the district court upheld the same reasoning that blood donation constitutes a service and not the contribution of a property. No transfer of property is recognized for purposes of section 170.
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