In this course, we will cover the following:The tax advantages of charitable giving Forms of donations and their tax consequences How to find the right charity Effectively utilizing trusts Additional Resources: Calculators Worksheets Workbook Glossary Calendar

There are many donations you can make other than writing a check or giving cash. In this section, we will discuss how to make donations in the form of property, appreciated securities and old clothing and furniture. Property All property donated can lead to a deduction as long as it has been held for more than one year. The value of the deduction is normally equal to the property's fair market value (FMV). FMV is the price at which the property would have been sold to a willing buyer. If you donate property held for less than one year, your deduction is limited strictly to your original cost. Securities If you chose to donate securities such as stocks or mutual funds that have increased in value since you've owned them, you are eligible for significant tax deductions. As with property, if held for more than one year, you receive a charitable tax deduction for their fair market value. If you held them for less than one year, then the value of the deduction is equal to your original cost basis, or the price you paid for the securities. What's more, as long as you do not sell the securities before you give them, you are not required to pay a capital gains tax on your gain. Hence, by giving securities you will: 1) receive a charitable tax deduction based on the current price and , 2) save on capital gains taxes. Not paying capital gains taxes represents a significant tax savings if you consider that the capital gains tax on stocks or bonds held for over a year is ten to twenty percent If on the other hand you choose to donate securities that have depreciated (or gone down) in value, you do not receive any savings (mainly because you do not have any). Instead, you may claim only the charitable contribution deduction for their fair market value. Alternatively, you can sell the depreciated shares and donate the proceeds to charity. In this case you will actually come out ahead as you still get the same charitable deduction and can also deduct the amount you lost on the investment. Old clothing and furniture If you have old clothing or furniture that you would like to donate, just ask the charity for a receipt that shows the value of your contribution. Additionally, you may deduct the mileage used to bring the items to the charity. You are entitled to fourteen cents a mile for each charitable mile you log on your car. Inventory If businesses donate excess inventory, their deduction is equal to their cost basis, or what it cost them to produce the goods and not what they may have sold them for. What does not qualify as a deduction Now that you know what you can deduct, here is a brief list of many of the contributions that do not qualify as a deduction on your tax refund: Bingo, raffle, and lottery tickets Dues paid to country, social and sport clubs, alumni associations, fraternities and sororities, and lodges Lobbying groups and political contributions Blood donations Tuition to attend private or parochial schools Monies to chambers of commerce Contributions to foreign organizations Dues to homeowners associations Monies to individuals Continue to: Part IV: How to Find the Right Charity