X
Our office puts your health first. Due to the recent Coronavirus outbreak, we would like to assure all our clients we are doing everything in our power to keep our communities safe and healthy. We are following all CDC precautions to minimize risks at our in-office appointments, as well as offering phone and video appointments. We want you to feel safe here at the Sodowsky Law Firm

Call Us (703) 436-1176

Sodowsky Law Firm, PC
  • Home
  • Practice Areas
    • Overview
    • IRS Problem Resolution
      • Liens and Levies
      • Offers in Compromise
      • Installment Agreements
      • IRS Audits
      • Unfiled Tax Returns
      • Wage Garnishment
      • Innocent Spouse Relief
      • IRS Notice of Deficiency
      • Understanding IRS Form 12277
      • Tax Fraud
    • Tax Issues and Controversies
      • Small-Business Tax Penalties
      • Employment Tax Challenges
  • About Us
    • Elden Sodowsky.
    • Alexander Robinson
  • Library
    • Articles
    • Blog
    • Books
    • FAQ
    • Resources
    • Scholarship
    • Videos
  • Testimonials
  • Contact Us
Sodowsky Law Firm, PC
  • Home
  • Practice Areas
    • Overview
    • IRS Problem Resolution
      • Liens and Levies
      • Offers in Compromise
      • Installment Agreements
      • IRS Audits
      • Unfiled Tax Returns
      • Wage Garnishment
      • Innocent Spouse Relief
      • IRS Notice of Deficiency
      • Understanding IRS Form 12277
      • Tax Fraud
    • Tax Issues and Controversies
      • Small-Business Tax Penalties
      • Employment Tax Challenges
  • About Us
    • Elden Sodowsky.
    • Alexander Robinson
  • Library
    • Articles
    • Blog
    • Books
    • FAQ
    • Resources
    • Scholarship
    • Videos
  • Testimonials
  • Contact Us

How to Save on Taxes by Giving Your Money (and Stuff) Away!

April 17, 2017 by sodowskylaw

Most people are aware they can get an income tax break for making monetary contributions to certain charitable and religious organizations. Most people also know they can get a similar income tax benefit for donating used clothing and other items to certain charitable groups and organization. What they may not realize is that they have other donation options available that can yield similar tax benefits. Read on to learn how to save on taxes this year.

Giving Appreciated Assets When Donating to Charity

One thing many people do not realize is that they can give appreciated assets when donating to charity. The appreciation escapes capital gains tax, and you get to deduct the full value if you’ve owned the asset for over a year.

For example, if you purchased 100 shares of XYZ Company for $10 per share in 2009 and that stock is now worth $15 per share, you have two ways you can make a donation to your favorite charity.

First, you could sell the stock for its current value of $1,500, then donate the $1,500 to the charity. When you do your tax return, you claim the $1,500 donation on Schedule A as a charitable donation. Then, you have to show the purchase and sale of the stock on Schedule D where you report a profit of $500 ($1,500 sale proceeds minus $1,000 cost basis). This profit is income on which you pay long term capital gains tax because you owned the stock for more than one year.

Alternatively, you could donate the stock directly to the charity. Again, you can deduct the full value of the stock ($1,500) on Schedule A as a charitable donation. In this case the appreciation escapes capital gains tax and you still get to deduct the full value because you have owned the stock for more than a year.

By donating appreciated assets as described above, the charity of your choice gets the full benefit of the value of the asset, you get an income tax deduction, and you can avoid tax on the appreciation. This is a win-win situation for both you and the charity.

Keep in mind that deductions for donations are reduced when adjusted gross income exceeds $254,200 for singles, $279,650 for heads of households, and $305,050 for married persons.

To Lear More, Contact Us Today

For additional information or assistance, contact 703.968.8000 to schedule a confidential consultation.

  • CONTACT US
    Interested in more information?
    Call us at 703.436.1176 or fill out this quick form and we will contact you within 1 business day
  • This field is for validation purposes and should be left unchanged.

Elden Ray SodowskyClients’ ChoiceAward 2018

Copyright © 2021 Sodowsky Law Firm, PC. All Rights Reserved • Privacy Policy • Sitemap

Alexandria | Arlington | Centreville | Dale City | Reston

  • Facebook Account Sodowsky Law Firm
  • Youtube Account Sodowsky Law Firm
Optimized Attorney