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    9 9 Presentation Transcript

    • “unrelated” tangible personal property to a public charity
      By
      Angel melgosa
      Valuation and Income limits for
    • Relevant Client Information
      John Brown (age 50) is a Vice President of Loans & Jane Brown (age 52) is a High School English teacher.
      Both volunteer their time at the YMCA in their city and would like to make a charitable contribution to the YMCA but their funds are tied up.
      Combined AGI of $150,000
      No children
      Both collect art work and paid $20,000 for a painting 10 yrs ago now valued at $50,000.
      Would like to give the painting to their niece, Joselyn, since they have no children, they are remodeling their home, and she is an Arts Major.
    • Charitable Contribution of Tangible Personal Property for “unrelated” use Basics
      50% Deduction of AGI can be taken BUT ONLY the cost of the tangible property can be used as the deduction NOT FMV.
      ( Tangible Personal Property)
      (Public Charity)
    • Alternative #1 “Giving the artwork to Joselyn”
      No Tax Advantage
      And YMCA gets nothing
    • Alternative #2 “Contribute artwork to YMCA”
      $20,000 tax deduction and went from 28% tax bracket to 25% tax bracket; Joselyn gets nothing.
    • Alternative 3 “Selling artwork and contributing to YMCA”
      Cost $20,000
      Sold $50,000
      Gain $30,000
      15% tax on Gain
      $20,000 can be gifted to Joselyn to start her own art collection!
      $25,500; More Money to give, More Money Saved on tax, and Reduced Tax Bracket!
      AND
    • We Recommend…
      Alternative #1
      Alternative #2
      Alternative #3
      WINNER!!!
    • THE END