Gift Tax Return example essay topic

Donations Helping Others Helps Yourself Giving a gift to a needy cause can be a very generous deed. Other than being benevolent, it can be self rewarding, especially when April 15th rolls around. Many people think 'Oh, I ain't rich myself... how can I afford to help others... I'm the one who needs the help!' Well, your wrong.

Giving certain contributions pay off more than others, and if your are like me, my number one goal in life is to not let the IRS get the best of me. So, if you don't want the IRS to suck your savings away next year, then I suggest you do a good deed this year... Now here is how... There are there main items which are commonly donated.

First, used cars. Just about all families have an old car that nobody drives... you know... the one that leaves that oil spot running down your driveway. Well usually, if you donate a half- decent looking car, you can deduct the 'Kelley Blue Book' value of the car off of your taxes. This is also a good thing to do instead of trading your old car to the dealer when you buy a new one. Your old car will go to help someone and you may even come out making a little more money in the long run. Antiques and collectables are also good to donate, but the amount of money you receive is wavering.

For instance, if you donate a collectible to a museum, and the museum keeps it for display, you receive a market value deduction. But, if the museum decides to sell it, you only receive the amount that you paid for it, so you break out even. Another catch is that you have to own the antiquity for at least a year in order to receive the full market value. So if your plan to donate any antiques, make sure you check with the organization to see if they are going to keep it, rather than sell it. Real Estate isn't very popular to donate, who has an extra chunk of land just sitting around? But if you do, you might want to pay attention.

When you donate real estate, that you owned for at least one year, you can write off the fair market value. If the property of your real estate has gone down since you purchased it (capital loss), then it would be wise to sell your property, donate the proceeds to a charity, and deduct the loss on your tax return. By doing this, a you can change a financial loss, and break even. Well, I hope I have persuaded you to help others by donating. It usually helps yourself to.

One last thing to remember... the more you claim to donate, the more likely the IRS is to audit you... so be careful and keep adequate records of your contributions. Don't Over give Many people, especially before they die, decide to give some of their possessions to there children, grandchildren or friends. Giving away your money before you die is a good idea, because there are extremely high frees for distributing money after death. But, the main thing to keep in mind is that if your gift is less than $10,000 it is tax free. Every person is allowed $675,000 estate tax free. So if you were to give a non-cash gift greater than $10,000 than it would be subtracted from that some.

Remember to always file a gift tax return. If you do so, then the IRS can only dispute the value of your gift for three years., If you don't file the return then they can dispute it forever. Have fun giving..