Tax Law and Charitable Contributions

Tax Law and Charitable Contributions

Introduction

This paper intends to explore the charitable contributions made my individuals and the IRS tax laws concerning such charitable activities. The major charitable contributions by individuals have been made by Lawrence J Ellison, A, Alfred Taubman, Jack C. Taylor and Conrad T Prebys.

Charitable contributions are donations given to charitable causes. Donating money to charity is often regarded as a positive character trait, especially among the rich, and besides being considered as something worth doing, charitable contributions can also lead to certain tax advantages.

Discussion

One of the basic characteristics of public welfare or charitable nonprofit, In the United States, for example, only in this qualification by the IRS (Internal Revenue Service) audit, the agency before a charity fund-raising in the United States. The annual income of less than $ 5,000 small charities or church organizations do not need to apply for tax exemption. In accordance with the provisions of the U.S. Better Business Bureau Council (Council of Better Business Bureaus), collecting donations and recruiting Member organizations generally can enjoy one of the following types of tax-free treatment (Hopkins, 2011).

Internal Revenue Code section 501 (c) (3)

This clause provides that enjoy tax-exempt status to groups engaged in the following business: dedicated to charitable, educational, religious, scientific, literary career, in support of national or international amateur sports competition, to prevent a child or animal abuse, as well as public safety detection. (In addition to the last one, several other can be exempt from federal income tax )

However, an organization with tax-exempt status does not mean that donor contributions automatically enjoy duty-free policy. For example, in most cases, donations to foreign charities may not be in the United States in the form of federal income tax relief. Donated to charities you enjoy duty-free treatment, depending on the nature of its foundations (Steuerle, 2008). Institutions contained in section 501 (c) (3), there are three basic categorie:

Public charity - the public charity income, a large part from the public (and more broadly, refers not only to the family and friends) or the government. IRS regulations 509 (a) (1) Article 509 (a) (4) bars have made provisions.

Private foundations - private foundations, most of the income from investments and donations, Foundation the money as a subsidy granted to other groups. Section 509 (a) of the IRS regulations made provisions it.

The private operation Foundation - private operation Foundation donated the majority of the ...