Charitable Deduction of Inherited Real Property

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Subject Author Date Charitable Deduction of Inherited Real Property wjsafe 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... Phil Marti 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... removeps-groups@yahoo.com 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... Bill Brown 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... D. Stussy 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... D. Stussy 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... LoTax 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... D. Stussy 10-30-2009  Re: Charitable Deduction of Inherited Real Propert... Stuart A. Bronstein 10-31-2009  Re: Charitable Deduction of Inherited Real Propert... D. Stussy 10-31-2009  Re: Charitable Deduction of Inherited Real Propert... Seth 11-02-2009  Re: Charitable Deduction of Inherited Real Propert... wjsafe 11-04-2009
Posted by wjsafe on October 30, 2009, 12:28 am Please log in for more thread options What would be the 2009 charitable deduction under current IRS rules for the following scenario? AGI= $40000 Home Inherited on 6/1/2009 and donated to a 50% limited organization on 6/30/2008= $50000 FMV of home on date of death of decedent Additional cash contributions to a local church= $5000 -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on October 30, 2009, 5:37 am Please log in for more thread options On Oct 30, 12:28 am, wjsafe wrote: > What would be the 2009 charitable deduction under current IRS rules > for the following scenario? > AGI= $40000 > Home Inherited on 6/1/2009 and donated to a 50% limited organization > on 6/30/2008= $50000 > FMV of home on date of death of decedent > Additional cash contributions to a local church= $5000 $20,000 deduction for 2009; $35,000 carried forward to 2010. See the instructions for Schedule A. Phil Marti Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by removeps-groups@yahoo.com on October 30, 2009, 12:41 pm Please log in for more thread options > On Oct 30, 12:28 am, wjsafe wrote: > > What would be the 2009 charitable deduction under current IRS rules > > for the following scenario? > > AGI= $40000 > > Home Inherited on 6/1/2009 and donated to a 50% limited organization > > on 6/30/2008= $50000 > > FMV of home on date of death of decedent > > Additional cash contributions to a local church= $5000 > > $20,000 deduction for 2009; $35,000 carried forward to 2010.  See the > instructions for Schedule A. A house is capital gain property, right? So the 30% rule would apply for the house (max $12,000), and the 50% rule for the cash (max $20,000), with a combined max of $20,000. In this case the deduction would be $17,000 ($12,000 plus $5,000). However publication 526 says "However, the special 30% limit does not apply when 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. Instead, only the 50% limit applies." That seems to mean that if you deduct the cost basis you get to use the more generous 50% rule. The value of the home is probably similar to what it was on 6/1/2009, maybe even less, so we could make the election. Is this why you said the limit is $20,000. In addition: Do we have "Temporary Suspension of 50% Limit for Midwestern Disaster Area Contributions" in 2009? If so, then the $5,000 may be subject to the 100% limit, provided that it is used for relief efforts. It might be a good idea to convert IRA to Roth. Doing this will increase your AGI, but the itemized deduction would wipe out half of it. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bill Brown on October 30, 2009, 3:59 pm Please log in for more thread options On Oct 30, 12:41 pm, "removeps-gro...@yahoo.com" <removeps- gro...@yahoo.com> wrote: > However publication 526 says "However, the special 30% limit does not > apply when 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. Instead, only the 50% limit applies."  That seems > to mean that if you deduct the cost basis you get to use the more > generous 50% rule.  The value of the home is probably similar to what > it was on 6/1/2009, maybe even less, so we could make the election. If the donated property's FMV is less than basis, the donor must deduct FMV. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by D. Stussy on October 30, 2009, 9:06 pm Please log in for more thread options > > On Oct 30, 12:28 am, wjsafe wrote: > > > What would be the 2009 charitable deduction under current IRS rules > > > for the following scenario? > > > AGI= $40000 > > > Home Inherited on 6/1/2009 and donated to a 50% limited organization > > > on 6/30/2009= $50000 > > > FMV of home on date of death of decedent > > > Additional cash contributions to a local church= $5000 > > > > $20,000 deduction for 2009; $35,000 carried forward to 2010. See the > > instructions for Schedule A. > > A house is capital gain property, right? So the 30% rule would apply > for the house (max $12,000), and the 50% rule for the cash (max > $20,000), with a combined max of $20,000. In this case the deduction > would be $17,000 ($12,000 plus $5,000). > > However publication 526 says "However, the special 30% limit does not > apply when 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. Instead, only the 50% limit applies." That seems > to mean that if you deduct the cost basis you get to use the more > generous 50% rule. The value of the home is probably similar to what > it was on 6/1/2009, maybe even less, so we could make the election. > Is this why you said the limit is $20,000. > > In addition: > > Do we have "Temporary Suspension of 50% Limit for Midwestern Disaster > Area Contributions" in 2009? If so, then the $5,000 may be subject to > the 100% limit, provided that it is used for relief efforts. > > It might be a good idea to convert IRA to Roth. Doing this will > increase your AGI, but the itemized deduction would wipe out half of > it. Why would basis be different from FMV? He inherited it 29 days before the donation date. Upon inheritance, his basis IS FMV, and 29 days is not going to change the valuation. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted decrease in value on inherited property - deductible ? 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