IRS Zoom

[jcolvin2]

https://www.irs.gov/newsroom/final-regu ... ax-credits

[Famspear]

https://www.irs.gov/newsroom/final-regu ... ax-credits

From the linked material:

The Treasury Department and the IRS have determined that it is appropriate to apply longstanding principles under [Internal Revenue Code] section 170 that require a taxpayer to reduce the amount treated as a charitable contribution by the value of the return benefit received. As discussed earlier in this preamble and in the preamble of the proposed regulations, the final regulations are consistent with the principle that a ‘‘payment of money generally cannot constitute a charitable contribution if the contributor expects a substantial benefit in return."

--from T.D. 9864, 84 Fed. Reg. 27513, 27515 (June 13, 2019), amending 26 CFR sec. 1.170A–1.

EDIT: And, thanks Colvin! You're always on top of the situation!

[AnOwlCalledSage]

Unfortunately, that drifts dangerously close to typical tax denier rhetoric

I think we owe new wash ups the benefit of the doubt. It's easy to jump to conclusions based on the normal progress of such queries, but not everyone is being deliberately disingenuous. It's normally apparent after (approx) the first 3 postings which way it is going to go!

[Cpt Banjo]

From the linked material:

The Treasury Department and the IRS have determined that it is appropriate to apply longstanding principles under [Internal Revenue Code] section 170 that require a taxpayer to reduce the amount treated as a charitable contribution by the value of the return benefit received. As discussed earlier in this preamble and in the preamble of the proposed regulations, the final regulations are consistent with the principle that a ‘‘payment of money generally cannot constitute a charitable contribution if the contributor expects a substantial benefit in return."

In other words, the tax credit a state gives you should be treated just like the tote bag given by a local public TV station or like the choice parking space next to the football stadium that Wossamotta U. gives a rich alum in exchange for a huge donation.

[Famspear]

[ . . . ] I remember reading that, in response to Trump's tax bill of 2017, which eliminated the deductibility of state taxes [ . . . ]

A point of clarification: The 2017 law did not completely eliminate the deductibility of state taxes. For Federal income tax purposes, the law limits the amount of certain state, local, and foreign taxes that can be deducted for a given year to $10,000 ($5,000 if married filing separately). The limitation generally applies to tax years 2018 through 2025. See Internal Revenue Code section 164(b)(6), as added by Pub. L. No. 115-97 (Dec. 22, 2017).

[Dark Optimist]

One workaround that I remember being discussed was to change the state income tax for people who receive a W-2 to an employer obligation, similar to payroll taxes. If the employer is responsible for paying the tax, then the employer would be able to take a deduction.

Of course the employee would have to reduce their pay by the same amount of taxes being paid by the employer, but their net take home should work out to be the same.

Obviously there would be a lot of gaps and it would be painful to implement, but it could be done without trying to get around the federal tax law.

On a related note, with the increase to the standard deduction, does anyone have any statistics as to the number of returns affected by the 10k limit? I have moved to a smaller practice where I don't see a lot of 1040's any more, but those I have worked on, generally are taking the standard deduction, so even though they are limited to 10k, it doesn't impact their taxable income calculation.

[LaVidaRoja]

The question becomes, if the limitation did not exist, how many of those WOULD be able to itemize?

[Arthur Rubin]

On a related note, with the increase to the standard deduction, does anyone have any statistics as to the number of returns affected by the 10k limit? I have moved to a smaller practice where I don't see a lot of 1040's any more, but those I have worked on, generally are taking the standard deduction, so even though they are limited to 10k, it doesn't impact their taxable income calculation.

Statistics probably won't be available until late 2020, if then, but.... If Form 1040 Schedule A line 5e (total taxes) is the limit of $10,000, it seems likely that Form 1040 Schedule A line 17 (total itemized deductions) would exceed the standard deduction for a single person, $12,000.

[notorial dissent]

Here's what you said:

"Crazy as it seems to me it's says that Federal income, estate, and gift taxes are all gifts to the United States Government.. BUT heck i don't know just reading it out of the statue.. [sic]"

But, that's not what the statute says. Here's what the statute actually says:

For purposes of the Federal income, estate, and gift taxes, property accepted under paragraph (1) shall be considered as a gift or bequest to or for the use of the United States.

It's the commas that throw you/betray you EVERY time. in this case the comma after "taxes"

[jcolvin2]

EDIT: And, thanks Colvin! You're always on top of the situation!

Just trying to do my part ...

[Gregg]

For a Federal Tax Reg, it is quite clear and concise and very plain English.

Maybe people look for hidden meaning in the reg because the cannot believe that anyone might make a gift to the US Treasury. While not a frequent occurence, it does happen.

My home in Gettysburg is, or will be, a gift to the United States, when I assume room temperature.

[grixit]

Is it to be added to the national park?

[Gregg]

Is it to be added to the national park?

The Gettysburg National Military Park, which is technically not a National Park as it was originally gifted to the War Department. It is run by the Park Service, though. I suspect it will be used for office space, as its not real conducive to people coming and going, its not historically significant in and of itself, and I gutted the inside and redid it structurally to modern standards in 2010.
It is possible it could become a home for a Park Service employee as several other historical homes on the battlefield have.

[eric]

I have no intent on questioning your motivation in making a donation to the government, that is up to you. That being said, my family over the last fifty years or so has made substantial "donations to the crown" for various reasons. It varies by jurisdiction, but a well meaning donation for a park for instance, after the death of the donor, may end up being sold to developers. It's just something to consider, as in donate the property before your death, take the tax deduction when you need it most, and hope that the property will become so established that your original motivation for the donation becomes established in fact, if not in law.
Just for some background, our last donation was initiated by my father phoning me and informing me that he was , in his words, "pissing away my inheritance". It's still a park, thirty years after the fact, the local kids still have their tobbagan hill they've used for a 100 years, and the land is used as study area for reforestation.

[Gregg]

If you're not an American I don't think you appreciate how unlikely that is in this case. Aside from the fact that once the Gettysburg Military Park gets a piece of property its pretty much never going to let it go, the historical zoning district my house is located in makes it nigh impossible for anyone to ever tear down the building. Most of what they have is also donated and most of that donated with stipulations, I'm not worried about the government selling off the Gettysburg Battlefield to developers.

[eric]

Sorry, don't understand you crazy 'murricans. Our family's last donation was purposely to keep it away from developers. It was all part of a carefully devised illuminati plot over 50 years to control development in that part of town to ensure that the area would only be used for schools, a medical center, retirement home, and parks. The most significant indicator was that some of the land was donated by my "Orange" family to a cabal of the vatican to build a church and rectory.
Actually, to get serious for a moment. Donations to the crown in Canada have a lifetime which usually ends on the death of the donor, though there are arguments for 21 or 30 years. If you really want to give a gift to the crown with some caveats for some personal reasons it may be to your advantage to give it early. I'm not going to get into the gifting to the crown of a church cematary since that's a very specialized subject that has interest to few.

[notorial dissent]

Different rules down here, different laws, and Gettysburg is one of those really different situations all together.

And Gregg, I didn't get a chance to say so before, but thank you, sincerely thank you.

[The Observer]

And here all this time I expected Chili to get the house. Just goes to show that being willing to serve in an airmobile unit gets you nothing nowadays.

[Gregg]

And here all this time I expected Chili to get the house. Just goes to show that being willing to serve in an airmobile unit gets you nothing nowadays.

Chili Dog owns the little red race car.