  Electronic structure and transport properties of the fullerene C$_{82}$ and
the metallofullerene Gd@C$_{82}$ are investigated with density functional
theory and the Landauer-Buttiker formalism. The ground state structure of
Gd@C$_{82}$ is found to have the Gd atom below the C-C bond on the C$_2$
molecular axis of C$_{82}$. Insertion of Gd into C$_{82}$ deforms the carbon
chain in the vicinity of the Gd atoms. Significant overlap of the electron
distribution is found between Gd and the C$_{82}$ cage, with the transferred Gd
electron density localized mainly on the nearest carbon atoms. This charge
localization reduces some of the conducting channels for the transport, causing
a reduction in the conductivity of the Gd@C$_{82}$ species relative to the
empty C$_{82}$ molecule. The electron transport across the metallofullerene is
found to be insensitive to the spin state of the Gd atom.
