As we're counting down to 2017 and the year is coming to a close, you may begin to start thinking about charitable giving. Whether the holiday season is inspiring you to pause or you're thinking of year end planning, it's helpful to know some basic charitable giving information before the year-end tax deadlines.
First, what is the charitable deduction? This deduction allows you to deduct the value of the property given to charity from your estate and may reduce your taxes owed.
How does a gift qualify for the charitable deduction? There are specific requirements to qualify for this deduction.
*You must make the transfer, either during life or at death by will, rather than your executor or heirs
*The property must be transferred to a qualified charity for a charitable purpose. A qualified charity includes:
-The United States, any state, the District of Columbia, and any local government
-Certain religious, scientific, or charitable organizations
-Certain veterans organizations
-Certain fraternal organizations
-An employee stock ownership plan if the transfer is a qualified gratuitous transfer of qualified employer securities
The IRS publishes a list of charitable organizations (the Cumulative List) to which gifts or bequests will qualify for this deduction. The IRS does not define what a qualifying charitable purpose is. However, it has issued Letter Rulings that discuss what has been allowed or disallowed, and it has privately ruled that charitable purpose means the same for gift tax and estate tax purposes as it does for income tax purposes. Generally, a charitable purpose means a public purpose, as opposed to a private purpose.
If you're not planning on giving financially to charity this year, don't forget you can always donate your time or skills. Check out http://www.volunteermatch.org/ to find a charitable cause you care about.
Enjoy the holiday season!
Source: Forefield.com