Reminder: there are only 21 days left to file your 2013 tax returns without an extension.
Today I am continuing with the theme of charitable contributions, and taking a general look at some things you might contribute but cannot deduct. IRS Publication 526 discusses charitable contributions, and specifically sets out nine contributions that are not deductible.
- A contribution to a specific individual. Often this is seen when there are funds set up for a person's medical expenses, or a child's education when something tragic has happened to the parents, or victims of a fire/tornado/etc. Since these are being made to benefit one or a very small group of people, they are not deductible.
- A contribution to a nonqualified organization. I discussed which organizations are "qualified" last Wednesday.
- The part of a contribution from which you receive or expect to receive a benefit. This is often encountered when you buy a ticket to a fundraising event and the value of the meal is not deductible, or when you make a donation to a college athletic association in order to purchase season tickets, among other things.
- Qualified charitable distributions. These are distributions from a IRA to certain qualified organizations.
- Value of time or services. The IRS Publication specifically lists value of income lost while volunteering, and blood donations.
- Personal expenses. For some reason this specifically includes adoption expenses.
- Appraisal fees to get the fair market value of property you donate.
- Contributions to a donor-advised fund. Generally, these are funds where the donor can advise the fund how to distribute or invest amounts held in the fund.
- Partial interest in property. If you are going to donate something, it has to be your entire interest in the property.
If you need help with your taxes this year, call me at 832-387-4829 or email me by clicking the little envelope in the upper right corner of the page.