Every time you give to the charity of your choice it may also create a tax benefit for you. The money, the items and the real property that you have donated to non-profit institutions throughout the tax year may be tax deductible which means that they could end up being the difference between a good tax return and a great tax return. Depending upon the kind of donation and the type of charity or foundation that you chose to donate to, the tax deduction it creates could be very helpful to you for reducing the amount taxes that you owe. Many successful and wealthy people state that at least to a certain degree, a part of whom they are and what they have become comes at least in part from the practice of giving. Contributing to charities can be a very convenient way to reduce your taxes.
Individual Real Estate Donations:
If you own a property that is deeded in your name, deeded to you and your spouse or if it is deeded to you and other individuals, the following rules apply:
-If you have owned the property for at least one year it falls under the long term capital gain classification of properties. This will allow you to reduce the maximum fair market price of the property being donated.
-The deduction of your charitable contribution is a maximum of 30% of your adjusted gross income.
-Surplus contributions can be carried forward for up to five years.
-The fair market price will have to be decreased by its corresponding depreciation rate through the contribution date in the event of the property being depreciated. Usually, the fair market value is determined through independent appraisal.