Hi voop,
Didn't mean to confuse you. As you can see, varying variables can yield varied tax answers.
Below, summary as in my PMs to you. Assume noncash contribution to a qualified organization.
I Ordinary income property (held 1 year or less):
...limit deduction to your basis, exclude short-term capital gain from your gross income, OR
...deduct the fair market value of the stock on the day that you donate, include short-term capital gain in your gross income.
II Capital gain property (held more than 1 year):
...deduct the fair market value of stock on the day that you donate.
***II provides better tax savings equivalent to the product of your gains at reduced long-term capital gain rate.
...per your example, $5,000 capital gain X 20% = $1,000
Deduction limit:
Gift of capital gain property to organizations such as churches, hospitals, private operating foundations, certain educational organizations, etc.
...30% of your adjusted gross income (AGI), OR
...50% of AGI if you choose to reduce the fair market value of the property by the amount that would have been long-term capital gain if you had sold the property.
See additional rules in the following URL:
irs.ustreas.gov
PM me should you need further clarification.
di |
