Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: Re: Deduction for donationg car Date: 12/22/1998 6:55 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
[[ I have a car that I want to donate. My wife & I differ on when to donate. This
year our gross income will be about $60,000. Next year it will be about
$200,000.]]

Well, I don't know the character of the income from this year to the next, but if it is all taxed at ordinary income, it is certain that your marginal tax rate would rise next year. Most likely substantially rise. Perhaps from the 28% bracket to the 36% bracket.

[[ Which year is best to donate the car for deduction? Would it be better for me to
donate it this year and take deduction now or wait till January and donate it to
take deduction from 1999 taxes?]]

Given the very sketchy income information that you provided, it seems as is you would be able to generate an additional deduction in the amount of about 8% of the value of the auto if you wait until next year. But there may also be some other things in your tax return that cause you reason to pause.

[[ If the deduction is for $5000, does it really make a difference if we donate next
year (I mean paying taxes on $200K vs. $195K. Will we be in the same tax
bracket?). ]]

Again, without knowing MUCH more about your specific tax issues, I can't say for certain. But, again, if this increase is due to an increase in "ordinary income", you can certainly expect your tax rates to rise unless your itemized deductions rise right along with your income.

[[ Will we get more tax benefit if we donate next year as opposed to this year?]]

Again, I don't know because I don't know your full tax history and infomation. But it would certainly seem logical that you would receive much more benefit from a 1999 donation as opposed to a 1998 donation.

If you would like to read more about the contribution of property, see IRS Publication 526 at the IRS web site.

TMF Taxes
Roy

Want to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Economic Implications of Cuba
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement