 | 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
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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)
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Cash
- Easy to give--the type of donation most
charities like best
- Be sure to get a receipt for gifts of $250 or
more
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Income-producing
property*
Such as:
- Artwork (if given by the artist)
- Inventory
- Section 306 stock (stock acquired in a
nontaxable corporate transaction)
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Tangible personal
property*
Such as:
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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.
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