THE ACCOUNTANT'S CORNER

November 16, 2017

2017 Charitable Contributions

Written by, Robert Clark
Charitable Donations

  • Special Hurricane Relief Contribution Provisions 
  • Contributions of Appreciated Assets 
  • Cash Contributions 
  • Non-cash Contributions 

Some recent tax deduction changes make 2017 a great year for charitable giving. Here are ways to donate that also give you a tax deduction. Remember though, if you want to deduct a charitable contribution on your tax return, the donation must be to a legitimate charity.

2017 Hurricane Relief - After the devastation inflicted by Irma, Congress passed a provision that allows taxpayers to donate money to hurricane relief charities without any percentage-of-income limitation. Further, the phaseout of itemized deductions for high-income taxpayers will also not apply to hurricane relief contributions. To qualify, the contributions must have been made in cash between August 23 and December 31, 2017, and the donation documentation must verify that the donation is for Irma relief.

Contributions of Appreciated Assets – Although this is not a new strategy, taxpayers can donate appreciated long-term capital gain assets to a charity and deduct the fair market value (FMV) of the assets as a charitable deduction. For example, suppose you donate to your church’s building fund a stock that is worth $10,000 but that only cost you $2,000. Your charitable contribution would be $10,000, and you do not have to pay tax on the $8,000 appreciation in the stock. This strategy can also apply to land, homes, rentals, equipment, etc.

Cash Contributions - To claim a cash contribution, you must be able to document that contribution with a bank record, receipt, or a written communication from the Charity.

Non-cash Contributions – This is a type of contribution with which you can easily run afoul of the IRS because the contribution deduction is based on the FMV of the item being contributed, not the item’s original cost, and most used items such as clothing and household goods depreciate substantially.

Donate Unused Employee Time Off, & IRA to Charity Donations– These two are rarely used, but give us a call if you’re interested in learning more.

Please contact us at 305-363-5429 if you have questions.

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