Long-term gain intangible property (stock shares), are deductible up to 30% of AGI in the year of the gift. $50,000 AGI x 30% = $15,000. The remaining $5,000 contribution can be carried forward to future tax years.
Donations exceeding $5,000 require appraisals. The donation of a car exceeding $500 in value will require a written acknowledgement from the charity on IRS Form 1098-C (or an equivalent statement), but no appraisal is required.
Payments to political campaign committees or political action committees are non-deductible contributions, and do not meet the criteria of qualified public charities.
LT Capital Gain Property (unrelated use) deductible limit up to 50% of AGI at basis of the property. That's up to $15,000 ($30,000 x 50%) for Lefty for public charity donations. Since Lefty's cost basis of the card was $200, that's his maximum deduction.
ABC Corp's maximum charitable deduction is limited to 10% of taxable income or $10,000 ($100,000 x 10%). Since the donation is inventory, ABC Corp will be allowed to deduct the basis of the property or $2,000.
TaxesGenerosity may be its own reward, but some charitable giving also provides personal tax benefits.
TaxesAdjusted gross income (AGI) is a term from the Internal Revenue Code. AGI is used to determine a person’s income taxes due.
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TaxesGiving Tuesday is a good time to share the wealth, especially if you're interested in maxing out your tax deduction for charitable donations.
RetirementIf and how much you can contribute to a Roth or traditional IRA depends on your AGI.
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TaxesIt's no longer a free ride, but there are still tax benefits to doing so.