Thursday, November 13, 2008

Tax Effectiveness for Charitable Donation

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Tax Effectiveness for Charitable Donation Article Series Written
By Kyle J. Norton

1.
Understand Individual Charitable Donation for Tax Effectiveness
The US and Canadian income tax system provides tax credits to encourage taxpayers to make gifts to charitable organizations. The system is designed to grant a tax credit at the top marginal tax rate. The actual tax credit may vary slightly depending on the states and provinces in which the taxpayer resides.

2. Annual Donation Limit at Death
Gifts of this type of asset are limited by recent changes in the income tax rules. The donation of flow-through shares is made through the use of private corporations might resulting in additional tax savings, because this type of donation is not subject to capital gains tax, the full value of the flow-through shares donated would be non-taxable.

3. Donations at Death
Donations of cultural property can be claimed to the extent of 100% of net income. Excess donations can be carried forward five years. If the donation is made in the year of death, the donation credit can be carried back one year, to the extent of 100% of net income.