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Charitable Planning- What Does Not Count- to IRS? Part 2

At this time of year many donate to others less fortunate or for “good causes.” The Internal Revenue Service (“IRS”) will permit a deduction for any charitable contribution made during the taxable year. Contributions that are not deductible include:

  • A contribution to a specific individual,
  • A contribution to a nonqualified organization,
  • The part of a contribution from which you receive or expect to receive a benefit,
  • The value of your time or services,
  • Your personal expenses,
  • A qualified charitable distribution from an individual retirement arrangement (IRA),
  • Appraisal fees,
  • Certain contributions to donor­advised funds, or
  • Certain contributions of partial interests in property. i

EXAMPLE: Sean of Smithtown, donated money to help a family that lost their home in Lindenhurst, NY during Hurricane Sandy. All proceeds went to the construction company that repaired the house. NOT DEDUCTIBLE.

EXAMPLE 2: Same facts as above, but Sean instead donates money to a qualified organization for flood relief, hurricane relief, and disaster relief. DEDUCTIBLE, because donation not to specific individuals.

EXAMPLE 3: Ned of Nesconset, has a son Nate that does missionary work. Ned pays his expenses. NOT DEDUCTIBLE; Ned cannot claim a deduction for his son’s unreimbursed expenses related to his contribution of services.

EXAMPLE 4: Claire of Commack, made payments to a qualified state hospital that are for her niece’s care. NOT DEDUCTIBLE, even though the hospital is operated by New York State and is a qualified organization.

To be continued ….
Aaron E. Futterman, CPA, Esq. is a partner in the law firm of Futterman & Lanza, LLP with offices in Smithtown, NY and clients throughout Suffolk, Nassau, Queens, Brooklyn, Bronx, Richmond, New York, Westchester and Rockland Counties. He concentrates his practice to Elder Law, Medicaid Planning, Medicaid Applications, Estate Planning, Probate, Estate Taxes, and Estate Administration.

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