Federal Income Tax Charitable Contributions. 2 Contributions Problem 7 - 56.
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Transcript of Federal Income Tax Charitable Contributions. 2 Contributions Problem 7 - 56.
Federal Income Tax
Charitable Contributions
2
Contributions
• Problem 7 - 56
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
Both tangibleand personal?
No
4
Choose one:
Deduct Basis
to 30% of AGI *
to 50% of AGI *
Deduct FMV
Problem 7 - 56
5
Choose one:
Deduct Basis
to 30% of AGI *
to 50% of AGI *
Deduct FMV$50,000
30% x $100,000 = $30,000
Problem 7 - 56
6
Choose one:
Deduct Basis
to 30% of AGI *
to 50% of AGI *
Deduct FMV
$40,000
50% x $100,000 = $50,000
Problem 7 - 56
7
Contributions
• Problem 7 - 56• Problem 7 - 54
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
Both tangibleand personal?
9
Problem 7 - 54a. $40,000 FMV 30% limit
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
11
Problem 7 - 54a. $40,000 FMV 30% limitb. $10,000 basis 50% limit
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
13
Problem 7 - 54a. $40,000 FMV 30% limitb. $10,000 basis 50% limitc. $100,000 FMV 30% limit
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
15
Problem 7 - 54a. $40,000 FMV 30% limitb. $10,000 basis 50% limitc. $100,000 FMV 30% limitd. $50,000 basis 50% limit
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
17
Problem 7 - 54a. $40,000 FMV 30% limitb. $10,000 basis 50% limitc. $100,000 FMV 30% limitd. $50,000 basis 50% limite. $500 basis 50% limit
18
Contributions
• Problem 7 – 56 • Problem 7 – 54 • Problem 7 – 61
19
Problem 7 - 61Sales Price 30,000
If sold thencash donated
20
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000
If sold thencash donated
21
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%
If sold thencash donated
22
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%Additional Tax 3,000
If sold thencash donated
23
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%Additional Tax 3,000
Charitable Contribution 30,000
If sold thencash donated
24
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%Additional Tax 3,000
Charitable Contribution 30,000x Marginal Rate 35%
If sold thencash donated
25
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%Additional Tax 3,000
Charitable Contribution 30,000x Marginal Rate 35%Tax Savings 10,500
If sold thencash donated
26
Problem 7 - 61Sales Price 30,000Basis 10,000LT Capital Gain 20,000x CG tax rate 15%Additional Tax 3,000
Charitable Contribution 30,000x Marginal Rate 35%Tax Savings 10,500
Net Tax Savings -7,500
If sold thencash donated
27
Problem 7 - 61If stockdonated
Determining the Contributions DeductionFor Gifts to PUBLIC Charities
Cash?
Yes
Deductible up to 50% of AGI *
No
Capital GainProperty?
Yes
No
Both tangibleand personal?
Is FMV <Adjusted Basis?
Yes
Deduct FMV up to 50% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
No
Yes
Used inexempt
function?
No
No Deduct FMVup to 30% of AGI *
Deduct Adjusted Basis up to 50% of AGI *
Yes
ChooseOne:
* Excess amounts may be carried forward for 5 years
Copyright © 2000 by M. Ray Gregg. All rights reserved.
YesDeduct FMV
up to 30% of AGI *
Deduct Adjusted Basisup to 50% of AGI *
NoIs FMV <
Adjusted Basis?
29
Choose one:
Deduct Basis
to 30% of AGI *
to 50% of AGI *
Deduct FMV$30,000
Problem 7 - 61If stockdonated
30
Problem 7 - 61If stockdonated
Charitable Contribution 30,000
31
Problem 7 - 61If stockdonated
Charitable Contribution 30,000x Marginal Rate 35%
32
Problem 7 - 61If stockdonated
Charitable Contribution 30,000x Marginal Rate 35%Tax Savings 10,500
33
Tax Savings 10,500
Problem 7 - 61
If sold then cash donated:
If stock donated:
Net Tax Savings 7,500
40
Itemized Deductions
• Medical
• Taxes• Interest• Charitable
Contributions• Casualty Losses• Other
41