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Tag Archive for Non-Cash Charitable Contribution

Non-Cash Charitable Contribution Rules May Be Changing

John Stancil1

Under current tax law, a donor may deduct fair market value for certain non-cash contributions of a capital asset to IRS qualified tax-exempt organizations.  This provision in the law has been a great benefit to organizations as well as donors.

For example, assume a taxpayer owns a capital asset such as a tract of unimproved land.  The land has a cost basis to the taxpayer of $10,000 but its fair market value is $50,000.  If this land has been owned by the taxpayer for more than 12 months, he or she gets a deduction equal to the fair market value when donated to an IRS qualified tax-exempt organization. So the taxpayer gets a $50,000 deduction for an asset costing him or her $10,000 and does not pay any tax on the appreciated amount. Read more

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