...Issue: How to plan with charitable deductions to public charities, private operating foundations and private non-operating foundations. For this issue, the focus will be on charitable contributions and deductions of individuals. Definitions: Public charities: All organizations, foreign and domestic, described in IRC 501(c)(3) are private foundations except the types of organizations set forth in IRC 509(a)(1), (2), (3), or (4). Some examples of the exceptions that would qualify as public charities, as defined in 509(a)(1) and IRC 170(b)(1)(A)(i)-(v) are: churches, educational organizations, and hospitals. Private operating foundations, as best discerned from IRC 170, are foundations whose income or assets are used for operations that directly benefit the public, rather than for grant making. Some examples would be zoos, museums and libraries. Private non-operating foundations are foundations whose income or assets are disbursed to other, charitable organizations. Some examples are foundations that support cancer research. For this topic: Contribution base means adjusted gross income (AGI). For this topic: Capital gain property is defined as any capital asset that, if sold, would result in a long-term capital gain. Additionally, any property that is used in the trade or business should be treated as a capital asset. Analysis: IRC 170(a)(1) states: There shall be allowed as a deduction any charitable contribution…which is made within the taxable...
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...The charitable contribution deduction became a part of the Internal Revenue Code in 1917, however, it has undergone substantial revision in the time proceeding. This deduction was enacted to encourage giving to nonprofits by providing a tax incentive to individuals who donate. The deduction was enacted during World War I as a way to provide support for charities to survive the war (Thorndike 1). During this time, new taxes were placed on incomes and estates which became a threat to charities because the taxes took away from the extra money wealthy givers had to give to charities (Thorndike 1). As a result, the charitable contribution deduction became an incentive to individuals to give back to charities to keep them running without the help...
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...ACCT 625 Week 4 Homework Click Link Below To Buy: http://hwaid.com/shop/acct-625-week-4-homework/ Question 1. The following information relates to Hudson City for its fiscal year ended December 31, 2014. • On January 31, 2014, the city purchased as an investment for its debt service fund a fifteen-year, 6 percent,$1 million bond for $998,000. During the year it received $30,000ininterest.Atyear-endthefairvalueofthebond was $999,500. • On December 31, 2013, the Foundation for the Arts pledged to donate $1, up to a maximum of $1 million, for each $3 that the museum is able to collect from other private contributors. The funds are to finance construction of the city-owned art museum. During 2014, the city collected $600,000 and received the matching money from the Foundation. In January and February 2015 it collected an additional $2,400,000 and also received the matching money. • During the year the city imposed license fees on street vendors. All vendors were required to purchase the licenses by September 30, 2014. The licenses cover the one-year period from October 1, 2014, through September 30, 2015. During 2014 the city collected $240,000 in license fees. • The city sold a fire truck for $40,000 that it had acquired five years earlier for $250,000. At the time of sale the city had charged $225,000 in depreciation. • The city received a grant of $2 million to partially reimburse costs of training police officers. During the year the city incurred $1,500...
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...Q: What is a charitable organization? A: Charitable organization is defined by the Charitable Solicitations Act to mean any person, joint venture, partnership, limited liability company, corporation, association, group, or other entity 1. that is or holds itself out to be: a. a benevolent, educational, voluntary health, philanthropic, humane, patriotic, religious or eleemosynary, social welfare or advocacy, public health, environmental or conservation, or civic organization; b. for the benefit of a public safety, law enforcement, or firefighter fraternal association; or c. established for any charitable purpose; 2. who solicits or obtains contributions solicited from the public for a charitable purpose; or 3. in any manner employs a charitable appeal as the basis of any solicitation or employs an appeal that reasonably suggests or implies that there is a charitable purpose to any solicitation. Q: When does a "charitable solicitation" occur? A: A charitable solicitation occurs upon the making of any request, directly or indirectly, for money, credit, property, financial assistance, or any other thing of value on the plea or representation that it will be used for a charitable purpose. A charitable solicitation may be made in any manner. Q: How can I determine whether my organization is exempt from the registration requirements? A: Utah Code Annotated §13-22-8 sets forth a list of organizations that are exempt from the registration...
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...Correct Answers: | 1 | Total Incorrect Answers: | 4 | Your Mark (total correct percentage): 20% | | 1 | Once the Feltham's discharge their mortgage, what tax planning opportunity would be MOST APPROPRIATE during the years that immediately follow? | Incorrect | The correct answer: Mark maximizes contributions to a spousal RRSP for Sarah; Sarah maximizes contributions to her RRSP Your answer: Mark maximizes contributions to his TFSA only; Sarah maximizes contributions to her RRSP | 2 | Based on an analysis of Sarah and Mark's assets, from what tax advantages does the couple currently benefit? | Correct | The correct answer: deferral and avoidance only Your answer: deferral and avoidance only | 3 | If Mark exercises his 12,000 stock options at $39 and sells the underlying shares at the same time, what will his after-tax proceeds be? | Incorrect | The correct answer: $27,720 Your answer: $252,720 | 4 | In reviewing Sarah's method of remuneration from Cognitive Solutions, what statement is MOST APPROPRIATE? | Incorrect | The correct answer: Sarah should continue with her current form of remuneration as doing so creates RRSP contribution room for her. Your answer: Sarah should forego a salary and receive dividends from the company. She should also pay dividends to Mark and Gavin to take advantage of income splitting opportunities. | 5 | What tax planning strategies would be of LEAST BENEFIT to Sarah and/or Cognitive Solutions either now or...
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...intelligence Charting troubled Waters The Blue Issue worth.com volume 21 | edition 02 Boston, MA Leading Advisor Fidelity CharitableSM Ryan Boland, Director, Complex Asset Group “ ” When does it make sense to donate real estate to charity? By Ryan Boland While the donation of appreciated securities—stocks, bonds and mutual funds—is common, relatively few individuals donate real estate to charity. Under specific circumstances, however, such a donation can be mutually advantageous to both the giver (the owner of the real estate) and the recipient (the charitable organization). At a most basic level, those circumstances are: (1) when the property in question has significant long-term appreciation, such that the owner would incur a sizable capital gains tax upon selling it, and (2) when the property is relatively easy for the charitable organization to liquidate, with minimal chance for incurring liability or major carrying costs prior to the sale. These conditions are most frequently met by individuals seeking to donate a long-held primary or secondary home. The donation of commercial or industrial real estate is also possible, but brings many other potential concerns, including possible tenant or lease issues and other legal complications. The ideal scenario might look something like this: A couple who bought their house 25 years ago for $250,000 has seen it appreciate to a current valuation of $2 million. Their mortgage...
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...History Generosity is a quality, the desire to give to others without being asked. Before even the enactment of any legislation, philanthropists helped to shape the way we organize to support the less fortunate. The history of charitable organizations in the United States originated almost at the same time as the formation of our new nation. Benjamin Franklin, was one the founders of our nations and the earliest American philanthropists. He founded the University of Pennsylvania to educate youth. The early setters formed charitable and voluntary associations to help with issues of the era like education, orphanages, and illness (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 1). Young Americans were able to form charitable organizations to fill gaps in the social welfare programs. Back then, charities were mainly hospitals and orphanages support by religious groups and wealthy individuals. During the 19th century, these organizations were controlled and founded by private corporations or a person (Arnsberger, Ludlum, Riley & Stanton, 2008 p. 2). The bloom of the American industry gave birth to bigger corporations; at the same time, the increase of more formal charitable organizations. It wasn’t until the late 19th century that government began paying more attention to this new sector. The first legislation the government imposed was in1894, the Tariff Act that established a flat two percent tax to corporate income, but excluded charities. However, the Tariff Act was...
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...sole proprietorship to a public charity for its use. The fair market value of the asset was $800 and his basis was $600. A. The deduction allowed for the contribution of inventory is the lower of its fair market value or the donor's basis on the date of the contribution. Therefore, the deduction is limited to $600. B. Durwood Dodson contributed some shares of common stock that he had held long-term to a private charity. The basis of the stock was $8,000 and it had a fair market value of $7,000. B. The deduction allowed for the contribution of stock to a private charity where the stock is held long-term (over one year) when the donor's basis ($8000) is greater than the stock's fair market value ($7000) is its fair market value on the date of the contribution. Therefore, the deduction is limited to $7,000. C. Esther Ensign contributed tangible personal property that she had held long-term to a public charity. The asset had a fair market value of $10,000 and a basis of $6,000. The charity intended to sell the asset and use the proceeds for charitable purposes. C. The deduction allowed for the contribution of property held long term which is not used for a charitable purpose (such as the property is sold and only the proceeds are used for the charitable purpose) is the donor's basis on the date of the contribution. Therefore, the deduction is limited to...
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...Individual Portion Your individual task will be to contribute a section of the product proposal and pro-forma statement for the new product idea. Make sure your portion is 2 pages. In addition to sending it to a designated person who will consolidate all of the contributions into a proposal, this paper will be submitted to your instructor. Individually, each student will create 3–4 slides (with 200–250 word speaker notes per slide) covering their portion of the proposal in slide presentation format to be pitched to investors.Make sure to provide APA citation and references for both portions of this assignment. Please add your file. Your assignment will be graded in accordance with the following criteria. Click here to view the grading rubric. Part 1: Group Proposal Using the Small Group Discussion Board, the group will come to a consensus on a single product idea and develop a proposal of 8–10 pages addressing this new product, the state of its industry, and details of its market. The group will also come to a consensus on the business model approach: intrapreneurial or entrepreneurial. Details about the character of the company, its contributors, of why this approach was chosen for this project should be included in the proposal. Provide information on the product selected, its market, and its industry. The proposal must also provide new information on the chosen product's main competitors, how their product is different the competition, and detail the demographics...
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...55-1 This Section, which is an integral part of the requirements of this Subtopic, provides general guidance to be used in distinguishing contributions from exchange transactions, including membership dues and agency transactions . > Implementation Guidance 55-2 The accounting and reporting of grants, membership dues, and sponsorships is determined by the underlying substance of the transaction.Those terms are broadly used to refer not only to contributions but also to assets transferred in exchange transactions.A grant, sponsorship, or membership may be entirely a contribution, entirely an exchange, or a combination of the two; therefore, care must be taken in evaluating each grant, sponsorship, or membership agreement.In addition, those resource transfers may also have the characteristics of agency transactions. 55-2A The implementation guidance is organized as follows: a. Distinguishing contributions from exchange transactions (see paragraphs 958-605-55-3 through 55-8 : ) b. Distinguishing the contribution portion of membership dues (see paragraphs 958-605-55-9 through 55-12 : ) c. Distinguishing contributions from agency transactions (see paragraph 958-605-55-13 : ). > > Distinguishing Contributions from Exchange Transactions 55-3 Some transfers of assets that are exchange transactions may appear to be contributions if the services or other assets given in exchange are perceived to be a sacrifice of little value and the exchanges are compatible...
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...organized and planned out this week’s assignment well. | Communication with members and professor | 5 | Communication was open and clear. | Guidance provided to team members | 5 | Guidance was given and always responded back in a well timely matter. | Timely feedback and posting of final team product | 5 | Feedback was open and given. As well as tips and advice. | | B. If you are the Team Leader, comment in A. above and on the following: | What did you do in order to motivate your team’s contribution? | What would you try again? What would you never try again? | What did you do in order to motivate your team’s contribution? | | C. Write a short comment that describes your team members and team work during this week. Make reflective and substantial comments, indicating outstanding and non-participating member of your team. | Who were the team members? | | Who contributed the most, and how? | | Which were the two best contributions from the team members, and why? | | How did you do in teamwork this week? | | | D. General comments and recommendations for all team members and leader...
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...extra $4000 to train the horse. The Smiths are looking to donate the horse to the local police unit. The estimated fair market value of the Morgan Horse is $24,000. Issues: 1) Should Mr. and Mrs. Smith donate the Morgan Horse to the local mounted police unit? 2) How much can they deduct for 2011 as a charitable contribution? Conclusions: The Smiths should donate the Morgan Horse to the local police unit. In the event they donate the horse, they should recognize and deduct the $24,000 fair market value of the Morgan Horse. Discussions: The donation of the Morgan Horse is considered a donation of appreciated capital gain property because the Smiths have owned it for more than one year, and would recognize a long term capital gain if the horse was sold at the date of the contribution to the local police department. If the Smiths donate the horse to the public charity and the charity will use the horse for their primary function, the fair market value of the Morgan Horse can be recognized as a charitable contribution. Also, deductions for contribution of capital gain property are limited to 30% of the adjusted gross income. Since the Smiths charitable contribution is less than 30% of their adjusted gross income, the full fair market value is...
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...Towards a Better Understanding of Social Entrepreneurship Some Important Distinctions Jerr Boschee and Jim McClurg In this short article the authors outline the four key distinctions that differentiate non-profit social entrepreneurial organisations from other types of charitable non-profit organisations who claim to be making use of social entrepreneurial approaches. Towards a Better Understanding of Social Entrepreneurship Some Important Distinctions Jerr Boschee and Jim McClurg Contents: • Introduction • Four Key Distinctions 1. The differences between “entrepreneurship” and “social entrepreneurship” 2. The differences between “sustainability” and “self-sufficiency” 3. The differences between “earned income strategies” and “social purpose business ventures” 4. The differences between “innovators”, “entrepreneurs” and “professional managers” • Some Final Thoughts • Social Enterprise Definition • Further Information Introduction “Social entrepreneurship” is one of the most misunderstood phrases in the non-profit sector today. Everybody, it seems, has a different definition of what it means. This is our attempt to bring some clarity to the discussion. Our perspective has been shaped by 50 years of experience in the field, one as head of a national consulting firm and the other as the chief executive officer of a US$ 15 million social enterprise. Twenty years ago the idea of non-profits acting in an entrepreneurial manner...
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...Q1) List a dozen above the line deductions and explain the rule regarding moving expenses. List 7 itemized deductions from schedule A. Above the line deductions: a) Educators expenses b) Certain business expenses of reservists, performing artists, etc. c) Health savings account deduction d) Moving expenses e) Deductible part of self-employment tax f) Self-employed SEP, SIMPLE, and qualified plans g) Self-employed health insurance deduction h) Penalty on early withdrawal of savings i) Alimony paid j) IRA deduction k) Student loan interest deduction l) Tuition and fees deduction m) Domestic production activities deduction n) Jury duty repayments Below the line deductions (itemized deductions): a) Medical and dental expenses b) Taxes paid c) Interest paid d) Gifts to charity e) Casualty and theft losses f) Job expenses and certain miscellaneous deductions g) Other miscellaneous deductions Moving expenses: 1) Deduction for job-related relocation 2) Moving expenses are deductible to arrive at AGI to the extent the expenses are not reimbursed or paid for by the taxpayer’s employer. a) If expenses exceed reimbursements only the qualified expenses in excess of the reimbursement are deductible. b) If reimbursements exceed expenses, the excess is included in income 3) Qualifications: a) The individual’s new principal place of work is at least 50 miles farther from the former...
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...make a substantial impact on the community. The act of charity assists to make the community a better place to live by delivering services and goods to the group of individuals who may not otherwise have access to them (Ein-Gar & Levontin, 2013). While the funding of the government also makes a valuable contribution in fostering the charity work, many charities rely on donations from people and organizations as well. Furthermore, knowing that one has sacrificed something such as finances, property or time for the purpose to strengthen the way of living of people in need provides a sense of inner satisfaction and a purpose of life (Anheier, 2014). Many governmental entities are incapable to support certain types of charities. Therefore, these non-profit organizations depend on the funding from the common pubic. Among these charitable organizations, one organization that often comes in mind is the Bill & Melinda Gates Foundation due to its valuable contribution to the society. This paper will provide an overview about the Bill & Melinda Gates Foundation and highlights the projects it currently supports. Discussion Bill & Melinda Gates Foundation is a charitable organization situated in Seattle, U.S. The foundation came into existence by the efforts of Bill and Melina Gates (Bill & Melinda Gates Foundation, 2015). The foundation is considered as the largest private foundation across the globe. Additionally, the foundation is regarded as the largest transparently...
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