Can I have an opinion?

Practical and Practice issues for Professionals who practice in the area of taxation. Moral, social and economic issues relating to taxes, including international issues, the U.S. Internal Revenue Code, state tax issues, etc. Not for "tax protestor" issues, which should be posted in the "tax protestor" forum above. The advice or opinion given herein should not be relied on for any purpose whatsoever. Also examines cookie-cutter deals that have no economic substance but exist only to generate losses, as marketed by everybody from solo practitioner tax lawyers to the major accounting firms.
Arthur Rubin
Tupa-O-Quatloosia
Posts: 1447
Joined: Fri May 30, 2003 12:02 am
Location: Brea, CA

Re: Can I have an opinion?

Postby Arthur Rubin » Thu Nov 19, 2015 1:09 am

Burnaby49 wrote:
Arthur Rubin wrote:IIRC, when you give "appreciated property" in Canada, even to a charity where a cash gift would be deductible, you are liable for capital gains tax as if you had sold it. Is that correct, Burnaby?


Yes, at least it was true when I worked in the area but that is quite a while back. The reasoning is obvious. If you make a cash donation to a charity then the money is assumed to come from after tax income. You get a deduction to the extent of the cash to partly compensate for your generosity.
The US doesn't have "deemed sale", and US tax law on charitable donation is quite clear. If you donate property, and it was held less than a year, you can deduct the lesser of basis and FMV. If held more than a year, you can deduct FMV. From this deduction, you remove the value of things or services given you by the charity or at the charity's request.

There are substantiation and, potentially, assessment requirements, as well.
Last edited by Arthur Rubin on Thu Nov 19, 2015 1:27 am, edited 1 time in total.
Reason: Adding additional requirements
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95

Arthur Rubin
Tupa-O-Quatloosia
Posts: 1447
Joined: Fri May 30, 2003 12:02 am
Location: Brea, CA

Re: Can I have an opinion?

Postby Arthur Rubin » Thu Nov 19, 2015 1:20 am

Famspear wrote:In effect, the Supreme Court ruled that on these facts, the Treasury Department -- and the Tax Court -- were correct. Although there was no legal obligation on the part of Berman to transfer the auto to Duberstein, the receipt of the auto was taxable to Duberstein as income; it was not a gift for Federal income tax purposes.
I don't have any clients who are winners on game shows; however, the hypothetical "Let's Make a Deal" scenario, when the winner has a choice of doors; behind one door is a goat; behind another door is a year's supply of "Rice-a-Roni"; behind the third door is a car. Suppose the "winner" ends up with the goat. Is he taxed on the FMV of the goat? Similarly, in a less hypothetical scenario, he wins the car, but cannot legally take possession of the car. (In some states, you must have a drivers license to own a car.) Is he taxable on the FMV of the car, even though there is no actual benefit? If it's a new car, and he could take possession of the car, and sells it immediately, is he taxed on the FMV of a new car, but gets the cash value of a "gently used" car?

In these scenarios, there is no question that the winner is taxed on the FMV of the item; but FMV can be negative, in some cases.
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95


Return to “Tax Practice & Policy and Tax Shelters”

Who is online

Users browsing this forum: No registered users and 1 guest