Discusses abuses and issues in financial planning, including questionable compensation practices, bogus institutes and accreditations, bad products, annuity abuse, inappropriate life insurance sales, living trust mills, and related misconduct. Also answers questions about usually legitimate but developing areas such as life insurance premium financing, life settlements, charitable gifting strategies, etc. Includes discussion of asset protection scams.


Post by sammyk » Tue Mar 13, 2007 7:48 pm

First Question: Is it possible to deduct charitable contributions on my individual tax return if I do not itemize? As far as I know it can only be done on the federal schedule A. Does anybody out there know of a different way?

I want to set up up a non profit organization to do charitable work with orphans and impoverished school kids in Europe and Africa. This non profit will be funded from a portion of our salaries(my wife and I) and may later expand to solicit/receive donations from friends who have expressed an interest in the project.

I need to know the tax implications of this:
2.If I set up the non profit, get tax exempt status from the IRS and I control where the funds go. Am I able to deduct these donations on my individual tax return?

From the people I have asked, I have learned that the IRS might have a problem with this as it might not be viewed as an arm's length transaction as I would be the donor plus have final control on where the funds go.

I do not want to do anything illegal or open myself up to perpetual audits from the IRS that will detract from the good we are trying to do.

3.If I set up the non profit, and give funds to a micro finance institution or project,how do I account for any returns(capital and/or any profit)?

4. Am I able to deduct costs of trips to the various projects in Europe and Africa as expenses on the non profit's tax return? Or can this be done on my individual return?

I would really appreciate the assistance of anybody out there who can give me direction on this project.

Thank you in advance.

PS:I know different states handle tax matters differently. I am a resident of Colorado