donation deductible or not

[ljwalters]

Client made a donation to two separate trust set up for hardship cases she heard about in the newspaper or on TV. Because they are each set up for one person only I told her they were not deductible. Just checking to make sure I am right. Getting late in the season and brain is fading.

Thanks Linda and buddy

[lbbwest]

Client made a donation to two separate trust set up for hardship cases she heard about in the newspaper or on TV. Because they are each set up for one person only I told her they were not deductible. Just checking to make sure I am right. Getting late in the season and brain is fading.

Thanks Linda and buddy

"Trust" is a term used very loosely by the general population. It sounds like you are describing an account set up FOR someone; as you are thinking those are not tax deductible. Only tax-exempt organizations that have filed and received the status as such are able to be donated to with a corresponding deduction by individual taxpayers. For instance, I own a condominium unit; my condominium is a tax-exempt entity (Homeowner's Association) HOWEVER, donations to the association are NOT tax deductible by me. Final example worthy child has illness, donations to worthy child are NOT tax deductible, child qualifies to be a recipient of Crippled Children's organization. Donations to Crippled Children is tax deductible. lbb

[ljwalters]

"Trust" is a term used very loosely by the general population. It sounds like you are describing an account set up FOR someone; as you are thinking those are not tax deductible. Only tax-exempt organizations that have filed and received the status as such are able to be donated to with a corresponding deduction by individual taxpayers. For instance, I own a condominium unit; my condominium is a tax-exempt entity (Homeowner's Association) HOWEVER, donations to the association are NOT tax deductible by me. Final example worthy child has illness, donations to worthy child are NOT tax deductible, child qualifies to be a recipient of Crippled Children's organization. Donations to Crippled Children is tax deductible. lbb

Thanks Ibbwest. That is what I told her. There were two different donations and they were both causes anounced on the news (trusts set up at some bank)

Linda and Buddy

[kcjenkins]

Then I'd check with the bank, Linda, if the amount is large enough to be worth it, to see if they were set up by, and administered by, an exempt organization. Occasionally these sorts of accounts are deductible, but rarely. If they are just a way of collecting funds for a needy person, it's not. But if it's set up by a church, for example, it might be. Usually, the amount is not big enough to justify digging into it, tho. I've had a client argue with me, until I pointed out, that even if that $100 did turn out to be deductible, it only made a $2 difference in his tax bill. That was the end of the argument. Not worth the trouble to find out.