Mar. 2019 Roundup for Professional Advisors

Professional Advisor Roundup
Donors can receive a charitable tax deduction when they use appreciated property for a charitable gift. They can also benefit from bypassing capital gains on that gift property.

In our roundup for professional advisors, we explore charitable gift annuity, scams to beware of during tax season, gifts of real estate and more. Read below to stay in-the-know on industry news.

Roundup for Advisors

Washington News: Taxpayer Advocate Service Scam
The IRS operates the Taxpayer Advocate Service (TAS) to assist taxpayers. As an independent organization within the IRS, the TAS exists to protect your rights as a taxpayer and help you with tax problems you cannot resolve on your own.

Lately scammers have been using robocalls claiming to represent the TAS. Read about common tactics used by these scammers so you can avoid any problems this tax season.

Personal Planner: Gifts with Life Income
Many philanthropists have acquired appreciated property over time. A great way to use this appreciated property is for a charitable gift. A donor of appreciated property receives a charitable tax deduction and also benefits from bypassing capital gains tax on that gift property. This article talks about ways philanthropists can make a gift to charity while also receiving income.

Case of the Week: Living on the Edge, Part 6
In the final article in this series, Rhea discovers the benefits of a gift of a remainder interest in a personal residence. In order to compute the charitable income tax deduction, Rhea is required to determine the estimated useful life of her home. The article outlines the ways Rhea can determine the value of a gift of a remainder interest in a personal residence.

Article of the Month: Investor or Dealer? – Gifts of Real Estate and Donor Classification
Philanthropically motivated individuals increasingly understand the value of gifting appreciated real estate to charity. Donors are often able to claim a deduction for the property’s fair market value while also bypassing capital gains tax that would otherwise be due if the donor sold the property. This is a win-win solution for the donor from a charitable and financial standpoint.

What is the result, however, when a donor is classified as a “dealer” of real estate and decides to make a gift of real property to charity? This article outlines why the distinction between dealer and investor is an important factor in the charitable giving process.