Charitable Giving Information

Archive for February, 2010

Charitable Giving Limits

Question: Do Obama and the Democrats want to limit deductions for charities because they don’t give anyway?

http://www.nytimes.com/2009/02/27/us/27charity.html?_r=1
Wealthy donors and the nonprofit groups they support were in an uproar over the Obama administration’s proposal to limit the value of deductions for charitable gifts, which was included in the budget the president presented to Congress.

http://www.huffingtonpost.com/2008/03/25/obama-gave-only-1-of-inc_n_93376.html

Democratic presidential candidate Barack Obama and his wife Michelle gave $10,772 of the $1.2 million they earned from 2000 through 2004 to charities, or less than 1 percent, according to tax returns for those years released today by his campaign.

Answer: I think that this is a back door assault on religious charities and they believe that it will cause less of a stir than directly taxing the organizations themselves.

Tax Shelters in Canada 6 - Limits to charitable donations

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Estate Tax Planning 2009

Question: Real Estate Tax advice.. very detailed ..any experts in real estate tax out there?

We are selling our principal residence in South Carolina which we will have lived in and owned for about 18 months (thus short of the 2 year mandatory minimum for tax free status).

We will have tens of thousands of dollars in capital improvements (new hardwood flooring, counters, siding, deck, extensive bathroom renovation..done in 2009). We also have lots of money in repairs and painting, cleaning, yard maintenance etc.

We will hopefully sell in spring 2010.

1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?
2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.
3. Can we deduct our closing costs from originally purchasing it?
4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

Thanks and Happy New Year!

K

Answer: 1. We plan to make about 80k over what we bought it for.. can we deduct any of what we spent fixing it up?

Add the costs of improvements, but not maintenance and repairs, to the purchase price of the house. Also, add the real estate commission you pay to sell the house to the purchase price of the house. The total of these amounts is included in the "basis" of the house (see also 3 for other additions to the basis). Only the difference between the selling price and the basis of the house is subject to income tax.

2. Will we get taxed on every dollar over what we originally paid in 2008? There are no extenuating circumstances to force the move.

No. You may be subject to tax only on the difference between the selling price and the basis of the house. Since you have owned the house for 18 months, your gain is long-term capital gain and is going to be taxed at a maximum of 15%.

3. Can we deduct our closing costs from originally purchasing it?

You can add the cost of the survey, deed recording fee, title insurance, and other expenses which are related to the purchase of the property to your basis. You cannot add any fees related to the mortgage, such as the mortgage origination fee.

4. Is there anything else you can tell me that might help..ie. things I CAN deduct to help me avoid some of the profit tax?

In the year of sale, if you have not deducted all of the points (also known as origination fees), you may deduct them on Schedule A.

Best advice is to seek out an experienced professional who can go into the details as mentioned above. It will be money well spent and can save you a lot in taxes.

Business Valuations for Gift and Estate Tax Planning: What Financial Planning Professionals Need ...

Donations From Walmart

Question: Are there peddler’s at your local Walmart?

Every Saturday it seems like there are at the one in my town. They set up shop at both main entrances. Sometimes it’s guys wearing funny hats, some kid selling candy bars, or some guy claiming he’s taking donations for the military. I find it to be a nuisance. I just wanna get some chimichangas and some Ben and Jerry’s. I wonder if I can call them to see if they can put a stop to this.

Answer: Wonder no longer - of course you can call them and ask them to put a stop to it. Find the number on their web site and tell them what you think. Or next time you are there, ask a guard if they have permission to be there. Walmart may allow charities to conduct sales at the entrance to provide assistance to those charities. But if they don't have approval, they could be immediately removed.

Walmart Donations at Jeff CityStore Opening

Tax Planning Manual

Question: False Advertising; did I get ripped off?

I recently purchased a treadmill on Craigslist and I was told that the treadmill was only ‘a couple years old.’ Also, I was told the seller paid $1300 said years ago. I originally offered $400, with a listed price of $600 obo, but seeing as it had hardly been used and was only ‘a couple’ years old, I was willing to pay the $460 she bargained back with. Once I had it home I was reading the owners manual she included…and the original Bill of Sale fell out. It listed that she herself only paid $1094.99 shipping/tax included; it also said that she purchased it in 2003, double the amount of time ago she had advertised. Am I out the money with no possible repercussions or would I be able to make a claim in court? I don’t necessarily plan on taking it that far should I be able to, I just want her to know I’m serious about getting back the extra money I offered because it was advertised as a late model.

Answer: You know, a really good pair of running shoes is maybe $90 - and you get to go outside. Treadmills are clothes dryers waiting to happen.

Rhonda Abrams