Charitable Giving Information

Charitable Trust Setting Up

Question: What restriction and costs apply when I withdraw principal from a charitable reminder trust (CRT)?

If I set up my CRT as a revocable trust, I should have legal rights to change my mind and revoke/change the trust anytime. So the money shouldn’t get stuck forever as long as I’m still alive. However, the IRS may want a bite from any principal withdrawal. If so, how much penalty or tax would I need to pay?

Answer: First of all a CRT can't be set up as a revocable trust. It would either be a corporation or an irrevocable trust. This is because in order to have a legal CRT at least 10% of what you put into the trust is the minimum amount that should go to charity at the end of the trust term, generally at your death.
The order of distributions from a CRT are ordinary income first, then long term capital gain, then tax exempt income and finally principle. The principle is not taxed to you or the trust.
You should look at the trust document in order to determine the distribution provisions of the trust. There are different ways to structure these payments and your document will tell you how this is to be done in your case.

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Inheritance Tax Planning Guide

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inheritance tax guide

Donations Tax Deduction Clothing

Making a charitable donation is a noble act. Charity need not be just with money. It can also be done by donating objects like clothes, furniture, cars and just anything. Cars are donated to the recipients directly or they are sold and the money is given away as charity. Many people prefer to donate used cars for helping the community.

There are many charitable organizations that accept cars as a donation. These cars need not be in running conditions to be donated. The cars are generally sold or auctioned and the proceeds are used for charity work. There are some organizations that accept car donations, sell the cars and give the proceeds to other charitable organizations.

Donating a car is a noble gesture. It is also a good tool for reducing tax payments. Car donation to an approved 501(C)3 charity organization is tax deductible under certain clauses. These are applicable for all kinds of cars. You can claim the car’s fair market value if the car is worth less than $500 or it is in good working condition. You can claim deduction equal to the actual sale price of the car is the car is worth more than $500. However, before donating, ensure that the donation program is a qualified, 501(c)3 IRS registered charity since only such programs are eligible for tax deductions. Information about such charity programs can be obtained from the IRS website or in the Publication 78 that is available at most public libraries. If the total donation is more than $500, then a separate form (8283) has to be filled. Donating a car for tax purposes requires itemized deductions on the personal tax return.

Determine the value of the car meant for donation. This can be done by checking the blue book value. Take the condition of the car into consideration while determining its value. Most charity organizations take donated cars for free, but there are some which charge certain fees. Make sure you have the title for the car.

Most charity organizations that accept car donations also provide other services like free vehicle pick-up, easier/hassle-free paperwork and easy online application forms. The donations can also be made to your preferred charities. These days, making a charity car donation has become very easy with online application forms and faster processing. The whole process takes just 2-3 days. Car charity organizations can be located online over the internet or they can also be found in yellow pages or through advertisements.

About the Author:

Charity Car Donations provides detailed information on Charity Car Donations, Child Charity Car Donations, Catholic Charity Car Donations, Used Car Charity Donations and more.

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Tax Planning 2009 India

Question: Citizens unite! What do you think about your own US company I B M outsourcing our jobs to lndia?

And I B M also wants govt stimulus $$$ from your taxes?
Are you mad?

http://www.cnn.com/2009/US/03/26/ibm.outsourcing/index.html

(CNN) — IBM’s reported plans to lay off thousands of U.S. workers and outsource many of those jobs to India, even as the company angles for billions in stimulus money, doesn’t sit well with employee rights advocates.

Answer: Just another example of what happens when you demonize a company without considering the government policies that force them to do something like this.

Maybe if it were easier for a business to operate in the US, more jobs would stay here.

tax guru weekly program 8-3-2009

Tax Planning Attorney

Question: No federal tax taken out of paycheck…what to do?

A friend of mine just found out that no federal tax was taken out all year and now owes the IRS almost $5K. In hindsight, she should’ve checked her paystub, but when she approached her boss, she blamed my friend saying it’s because she only took 1 withholding (which is not true), then said it was the paycheck company’s fault. She knows she can get on a payment plan with the IRS, but she’s still really upset about how her boss handled it. Wouldn’t an employer who uses Quickbooks catch an employee who didn’t have a “federal tax” line on their paystub? Should she see a tax attorney?
Update – SS and Medicare was taken out properly.

Answer: It's possible for an employee not to need to have federal tax taken out, so no, the software would not flag that as an error. And if she had filed a W-4 with one allowance, and made enough money that she now owes $5K, then something would have bene deducted.

In any case, even though it sounds like her boss really handled her complaint badly, the problem is hers. She owes the money and will have to pay it. There's no point in seeing a tax attorney.

Fort Worth Business Planning Attorney Dallas Tax Law Lawyer