What Form 1041 Qft Charities 2023-2024

This is Valerie Chambers, and I'm going to talk about the itemized charitable contribution deduction for individuals. Charitable contributions generally must be made with the intent to give away something in return for nothing at all. In other words, it's not a transaction where there's a give and take like in a business transaction. So, if you're giving away something and receiving nothing in return, that qualifies as a charitable contribution. However, there are some exceptions to this rule. For example, if you're at a charity with a silent auction, you may pay more for something than its fair market value. In that case, the excess amount you pay over the fair market value would qualify as a charitable contribution, as long as it goes to a qualified organization. Qualified organizations are usually 501(c) corporations, but they can also include local elementary schools and certain government entities like cities or townships. When giving away cash, it's pretty straightforward. You can deduct the amount of cash given away. However, when contributing property, there are two types of property to consider: inventory that you normally sell in a trade or business, and ordinary income property. The deduction for ordinary income property given to a charity is usually the amount you paid for that property, limited to its basis. However, if you're in a federally declared disaster area, there may be special rules for deducting ordinary income property. For example, after a couple of federally declared hurricanes, a business normally selling Coca-Cola and Diet Coke donated cases of bottled water (with the fancy label removed) to aid in disaster relief. When you donate items like food, water, or schoolbooks for people in a disaster area, there are often special rules that allow you to deduct the basis plus a little something extra, usually the difference between...