Posted in Tax and Accounting Desk
When it comes to deducting #charitable_gifts, all #donations are not created equal. As you file your 2015 return
and plan your charitable giving for 2016, it’s important to keep in mind the
available deduction:
Cash. This includes not just actual cash but gifts made by
check, credit card or payroll deduction. You may deduct 100%.
Ordinary-income property. Examples include stocks
and bonds held one year or less, inventory, and property subject to
depreciation recapture. You generally may deduct only the lesser of fair market
value or your tax basis.
Long-term capital gains property. You may deduct
the current fair market value of appreciated stocks and bonds held more than
one year.
Tangible personal property. Your deduction
depends on the situation:
·
If the property isn’t related
to the charity’s tax-exempt function (such as an antique donated for a charity
auction), your deduction is limited to your basis.
·
If the property is related to
the charity’s tax-exempt function (such as an antique donated to a museum for
its collection), you can deduct the fair market value.
Vehicle. Unless it’s being used by the charity, you generally
may deduct only the amount the charity receives when it sells the vehicle.
Use of property. Examples include use of a vacation home and a loan of
artwork. Generally, you receive no deduction because it isn’t considered a
completed gift.
Services. You may deduct only your out-of-pocket expenses,
not the fair market value of your services. You can deduct 14 cents per
charitable mile driven.
Finally, be
aware that your annual charitable donation deductions may be reduced if they
exceed certain income-based limits. If you receive some benefit from the
charity, your deduction must be reduced by the benefit’s value. Various
substantiation requirements also apply. If you have questions about how much
you can deduct, let us know.
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