Maxine Aaronson, Attorney at Law
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Tax Newsletter

  • The Unrelated Business Income Tax (UBIT)
    Nonprofit organizations, e.g., charities, were historically not taxed. In 1950, however, an amendment to the Internal Revenue Code made taxable income earned from activities that did not further the tax-exempt purposes of such... Read more.
  • Tax Issues Related to Qualified Domestic Relations Orders and Divorce
    An increasingly large portion of the assets of married couples consist of rights to payments and stock from pension plans. In many states such assets are subject to division during a divorce. Divorce and division of property are... Read more.
  • Estate Tax Valuation Methods for Securities
    In 2001, Congress passed legislation incrementally increasing the amount exempt from federal estate taxes and completely eliminating estate taxes in the year 2010. However, the legislation contains a “sunset” provision... Read more.
  • Choice of Entity: Delaware Series LLC
    Limited Liability Companies (“LLCs”) are a form of business ownership which is a separate legal entity much like a corporation. An LLC is treated like a partnership for tax purposes and like a corporation for liability... Read more.
Tax News Links

Deduction Limits on Contributions to Charities

If you made a tax-deductible contribution to a qualified charitable organization, the actual amount you can deduct may be limited to a percentage of your adjusted gross income. The amount that you are entitled to deduct depends on several factors:

  • Who you made a contribution to
  • What you contributed
  • Your income

The 50% Limit

In general, your charitable deduction cannot be more than half of your adjusted gross income. Contributions made to qualified organizations are subject to the 50% limit. These types of organizations include:

  • Indian tribal governments
  • The United States, District of Columbia, or any state or political subdivision of the U.S.
  • Churches
  • Educational organizations with a full student body and faculty on site
  • Hospitals and research centers

Different rules may apply to contributions of capital gains property (property that would bring long-term income).

The 30% Limit

Your charitable deduction cannot be more than 30% of your adjusted gross income. Contributions subject to the 30% limit include:

  • Contributions of capital gains property to any 50% limit organizations (generally)
  • Money spent on behalf of a student living with you who was selected by a qualified organization
  • Gifts to other qualified organizations besides those subject to the 50% limit
  • Gifts other than those that are capital gain property for the use of any organization
  • The 20% Limit

    For some contributions, your deductions cannot be more than 20% of your adjusted gross income. Contributions subject to the 20% limit are all those that are capital gains property gifts to or for the use of a charitable organization, aside from those that fall under the 50% limit.

    Note: If you contribute 20% or less of your adjusted gross income, there are no limits to the deduction for your total contributions.