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7th - If you recall you could divide up the ownership of...

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ANNOUNCEMENTS 1. There will be a quiz posted as of November 6, at 6 pm, covering chapters 5, 6 and 7. It will be open through the following Tuesday, November 10, till 11:55 p.m. Good luck. (One more quiz to go after this.) LECTURE-7th WEEK CHARITABLE GIVING (CHAPTER 9) You will find in the real world that most of the work done in this area is done by specialists. But whether or not you are interested in becoming one of these specialists, it is important that you become familiar with the concepts in the text. Once again, the text is straight forward, and this area will be covered in the CFP exam (and mine). Of course, the overriding concept in this chapter is that you can help yourself while “doing good”. Thus, there are a variety of ways to save taxes --- income, gift and estate --- by giving to charity. The same transaction can generate both income and gift/estate tax savings. You can now apply what you have learned in the trust chapter about life estates and remainder interests.
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Unformatted text preview: If you recall, you could divide up the ownership of your property in that way. Often times, a donor will retain a life interest in property and give the remainder (the balance) of the property at death. If this is done irrevocably during the donor’s lifetime, a value can be assigned to the expected remainder interest and the donor can then take an immediate income tax deduction for the amount of that value! Yet nothing has changed regarding his present right to use the property (only that he cannot now give it to anyone else that is not a charity). All of this would be pretty simple if the IRS did not come out with crazy limitations on how much could be deducted in one year. Sometimes 50%, sometimes 30% limited by other things. The rules are all in the text. The neat thing about learning all of this is that it does create a door-opener for you to use in talking with your local church and/or other charitable institutions. They all need money!...
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