The Tax Court has denied a couple's claimed income tax charitable deductions of $17,889 for gifts of tangible personal property and $320 for gifts of cash based on the couple's failure to provide a qualified appraisal, file Form 8283, or produce cash donation receipts. The court upheld the IRS's deficiency in the amount of $4,283.  MORE »

Despite the old adage warning against discussing politics in polite company, we just couldn't resist the partisan throw-down that happened between Sen. Harry Reid and radio talk show host Rush Limbaugh during the past few weeks that resulted in a $4,200,200 gift to charity via an eBay auction. We were curious how the gift was structured and thought you might be as well.  MORE »

The House Ways and Means Committee has released a summary of the Tax Reduction and Reform Act of 2007 that would repeal the Alternative Minimum Tax with offsets imposed on higher income earners, offer a package of one-year extenders, and reduce the corporate income tax from 35% to 30.5% with offsetting repeals of corporate deductions.  MORE »

Have you ever attended a charity auction only to have the well-meaning auctioneer rally the audience by saying, "Come on everybody, it's deductible!" In this updated article, Ronnie C. McClure, Ph.D., CPA, suggests donors, bidders, and charitable organizations may be in for a surprise. Although auctions probably fall more under the category of "spontaneous" than "planned" giving, there are several interesting tax facts you might want know before the next gavel falls.  MORE »

Calling the tax reform bill introduced on October 25 by House Ways and Means Committee Chair Charles Rangel, (D-NY) the "mother of all tax bills," ranking minority member Jim McCrery, (R-LA) issued a memo to republican members and staff that states that in addition to raising the top individual marginal bracket from 35% to 44%, the legislation "will erode the value of a series of tax deductions," including those for charitable giving and medical expenses.  MORE »

Under current law, IRC ?2031(c) offers an estate tax exclusion of up to $500,000 for landowners who preserve land with a conservation easement. The American Family Farm and Ranchland Protection Act (H.R. 3708), introduced by Earl Blumenauer, D-Ore., would increase this limitation to $5,000,000 and increase the applicable percentage of the value of land subject to a qualified conservation easement.  MORE »

In 1997 the IRS issued a favorable private ruling that allowed the annuitant of a deferred payment charitable gift annuity to select the start date of their payments at a time following the creation of the annuity contract. Left unanswered was whether such right would cause payments to be received for income tax purposes at the time the contract was created or when the payments began. The Service has now ruled privately that, "Where payments are made to an annuitant in accordance with section 72 and Treas. Reg. section 1.72, no amount will be constructively received by the annuitant until the annuitant actually begins receiving payments."  MORE »

Can an IRA be used to help indirectly finance life insurance owned by a charity? In this article, Steve Leimberg reviews and comments on recently published Ltr. Rul. 200741016 in which the Service concluded the arrangement is not a prohibited investment in insurance within the meaning of section 408(a)(3) of the Code such that the IRA would cease to be an IRA under section 408(a)(3).  MORE »

For purposes of determining the present value of an annuity, an interest for life or a term of years, or a remainder or a reversionary interest, Revenue Ruling 2007-66 indicates the charitable federal midterm rate under section 7520 for November 2007 is 5.2%; unchanged from the October rate of 5.2% and down 0.6% from the September rate of 5.8%.  MORE »

On September 19, 2007, Rep. Nick Lampson, D-Texas, introduced the Charitable Tax Relief Act of 2007 that would amend the Internal Revenue Code by striking section 408(d)(8)(F) to make permanent the tax-free distributions from individual retirement plans for charitable purposes.  MORE »

The Service has ruled privately that an early termination of a charitable remainder trust and distribution of trust corpus to the income recipients and remainder beneficiary (a donor advised fund) according to the present value of their respective interests will be treated as a distribution of long-term capital gain and will not be considered a prohibited act of self-dealing.  MORE »

Under current law, IRC ?2031(c) offers an estate tax exclusion of up to $500,000 for landowners who preserve land with a conservation easement. The American Family Farm and Ranchland Protection Act (H.R. 3708), introduced by Earl Blumenauer, D-Ore., would increase this limitation to $5,000,000 and increase the applicable percentage of the value of land subject to a qualified conservation easement.  MORE »

In a September 17 report, Treasury Inspector General for Tax Administration has stated that although the IRS has taken steps to ensure taxpayers and tax practitioners are aware of the reporting requirements for charitable contributions of motor vehicles, the Service should needs to take addition steps by developing a comprehensive outreach plan on these reporting requirements, lower the dollar threshold to ensure most of the returns claiming unsubstantiated deductions are addressed, and develop procedures to correspond with taxpayers to obtain missing Forms 8283 and supporting documentation.  MORE »