DEDUCTING NONCASH CHARITABLE CONTRIBUTIONS, an $18.5 MILLION DOLLAR LOSS Recently, a Tax Court memorandum decision dramatically pointed out two important facts about charitable contributions. The first is that the rules are highly complicated and full of traps for the unwary while the second focuses on the IRSs strict interpretation and application of the charitable contribution rules. In the Mohamed v. Commissioner (TC Memo 2012-152), the taxpayer failed to properly document and report their charitable contributions, as a result the taxpayer lost about $18.5 million of charitable contribution deductions. One main issue dealt with the taxpayer preparing his own return and attempted to navigate the complicated charitable contribution rules without #taxprofessional assistance. The IRS looked closely at compliance with documentation and substantiation requirements. Although charitable contributions all have documentation requirements, significant noncash charitable contributions (i.e. in excess of $5,000)must be properly documented with a qualified appraisal. Taxpayers that attempt to cure after the fact have been ineffective in winning. #TheMoreYouKnow #TriMergeCPA
Posted on: Mon, 19 May 2014 23:41:59 +0000
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