Crucial Timing of Charitable ContributionsCrucial Timing of Charitable Contributions
Avoiding the “anticipatory assignment-of-income” trap.
We interrupt this article for a federal district court case decided as we send our article off to Trusts & Estates.
We tell whether the anticipatory assignment-of-income doctrine applies to a donor’s economic detriment when making a charitable gift. We’ll go into the judicial history of this doctrine and how it can apply to charitable gifts. Simply put, if a donor gives an asset to a public charity, the donor gets a charitable deduction for the asset’s fair market value and avoids capital gains tax on the appreciation. But if a donor is already entitled to the income or gain attributable to the donated asset, the donor still gets the allowable charitable deduction, but has to pay the tax on the income or gain—out of the donor’s pocket, no...
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