Whitehouse & Company CPA's
Newsletter
The Best Property to Give to Charity

Giving to charity is not only personally satisfying, the IRS (and possibly your state) also rewards you with generous tax breaks.

  • Current income tax deduction if you itemize, subject to certain percentage limitations for any one year
  • Tax benefit received reduces the cost of the donation (e.g., a $100 donation from someone in a 30 percent tax bracket has a net cost of $70)
  • Reduces or eliminates capital gains tax if appreciated property is given
  • No transfer (gift and estate) taxes imposed
  • Removes any future appreciation of the donated property from your taxable estate
Highly appreciated or rapidly appreciating property*

Such as:

  • Intangible personal and real property (e.g., stock or real estate)
  • Tangible personal property (e.g., art, jewelry)
Cash
  • Easy to give--the type of donation most charities like best
  • Be sure to get a receipt for gifts of $250 or more
Income-producing property*

Such as:

  • Artwork (if given by the artist)
  • Inventory
  • Section 306 stock (stock acquired in a nontaxable corporate transaction)
Tangible personal property*

Such as:

  • Cars
  • Jewelry
  • Paintings
Remainder interests in property

Lets you use the property, or income from the property, until a later date. Gift and estate tax deductions are not allowed unless a trust is used. You may only take the income tax deduction in the year that the gift is actually conveyed.

* You may need to have certain types of property appraised.



Prepared by Broadridge Investor Communication Solutions, Inc, Copyright 2011