Let’s start with a few basic tax rules that make donations attractive. In order to take a tax deduction you must file a “long form” tax return and have “Adjusted Gross Income” on which you owe tax. If you donate Cash or un- appreciated assets then the maximum that may be applied within the IRS form is up to 50% of your AGI or if you donate

Part I of III

 

Just in time for tax season, CONTACT! Magazine supporter Percy Lorie offers a little food for thought.

 

CONTACT! MAGAZINE and its parent 501(c)(3) Charity, Aeronautics Aviation Enterprises like all Educational Charities needs and welcomes your support and contributions.

 

Knowing you have other organizations including Religious, Educational, Social Service, Hospitals, Service Organizations and a multitude of worthy recipients, a series of articles will be added along with links to informative sites, in the future, to help donors interested Experimental Aviation control and maximize for personal benefit and Charitable benefit their giving.

 

Let us first look into the problems and various personal goals of the average USA giver. Sorry, for those of you not subject to ”Uncle Sam’s” rules you may gain ideas however the tax advantages will not apply.

 

Where did you first learn charitable giving? For most of us it was thru religious training where as small children we took our 10 cents per week or more and placed it in a box or plate to help those less fortunate then ourselves. Perhaps you learned it at school with UNICEF or donations to other causes. Some learned by watching their parents or others in the community help out when called upon. Don’t forget the influence of television Ministries, Jerry’s kids or seeing the “Bell Ringers” in front of stores during the Holiday Season. For some that are a little older the contribution to support of the war effort by the purchase of Savings Bonds or in school Savings Stamps to support the World War II effort in behalf of the Allied Forces. Most remember their history of sales to the German people of a coupon/stamp book promising them a free VW Beetle from Hitler’s Nazi Government.

 

NO of course we do not agree with the goals or operation of every Charity, Government or Organization but there among the crowded list seeking your help worthy recipients that each of us wishes to help. In addition most within society wish to be absolutely sure the funds donated are in fact used for the stated or intended purpose and not diverted as we are reading about to subversive organizations or unreasonable operating overhead expenses.

 

Almost all give some or a lot to various Charitable or others needing our help and wish to promote and assist with their cause or efforts. Most of us wish to help and teach our children the responsibility and pleasures derived by generosity. Social Engineering is a part of most government laws and tax codes.

 

Ideas presented are not in detail nor suitable for every readers needs or desires but with careful reading you may find in this series of articles something that is of use to you.

 

appreciated assets then the maximum that may be applied in one taxable year is 30%. There is a provision that permits you in both cases to “carry forward” the un-used portion of the donation to future years for a period of (5) five years.

 

Assets could be cash, stock, bonds, deeds on Real or Personal Property or anything of value. “Fair Market Value” must be established. Cash of course presents no problem but other forms of gifts need a little caution when giving.

 

Stock or Bonds should not be sold by you when donating but transferred directly to the Charity for them to sell if you have a gain over “Adjusted Cost Basis”. In a loss just sell but if you have a profit transfer direct to the Charity as a “IN KIND” transfer. The instruction to your broker should read “DO NOT SELL BUT TRANSFER IN KIND”. Were you to sell at a profit and then donate then you would own tax on your gain at ordinary or long term capitol gains rates depending on length of time you held the securities. The value of “Common Stock” donated is its value as of “close of business” on the day donated. If you wish to donate securities and the Charity does not have an account, as is often the case, simply arrange for your broker to open one for them. This makes transfer “IN KIND” very simple. It could take a little time so don’t put off until the very end of the year.

 

Gifts of Real or Personal Property should be substantiated by a qualified appraiser if the gift is “substantial” or is Real Property be sure you take this extra precaution.. If total Personal Property donated exceeds $500. for one year be sure a receipt is obtained and it should be itemized again at the “Fair Market Value”.

 

Donations for things of value are not deductible. A good example of this would be a fund raising dinner. If however the amount charged for this dinner exceeds it value than that portion that exceeds the “Fair Market Value” of the dinner is deductible and the Charity will advise you of the amount of the deduction.

 

Hopefully this information will help as you file your 2004 taxes and in planning your giving and tax planning for this New Year. In the next issue tax ideas how giving affects your estate plan will be continued with a series of in depth information and details.

 

Future donors who give Aeronautics Education Enterprises will be acknowledged with their permission in this column of your publication.

 

CONTACT! MAGAZINE AND AEE OFFERS THIS REFERENCE MATERIAL ONLY AS A SUGGESTION THAT IDEAS PRESENTED BE DISCUSED WITH YOUR ATTORNEY, CPA, ACCOUNTANT AND/OR FINANCIAL ADVISOR. 

 

BACK to issue #80

FORWARD to Part II of III

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