Capital gain tax cut has charitable donation cost
Article Abstract:
The passage of the Taxpayer Relief Act of 1997 reduced the maximum long-term capital gain tax rate from 28% to 20% while increasing the after-tax cost of donating appreciated property to charities. Several factors affect the after-tax cost of giving appreciated property to qualified public charities, not the least of which is the property's fair market value. Taxpayers may claim the fair market value of capital gain property to charities as an itemized deduction. Under the statute, any item is capital gain property if its sale at fair market value results in a long-term capital gain. Furthermore, Section 1222(3) of the statute defines long-term capital gain as gain from property held by the taxpayer for over a year. Taxpayers should remember that the 28% capital gain tax rate still applies to capital assets held over 12 months but not more than 18 months under Section 1(h)(4).
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
Paying off personal loans becomes wiser as personal interest deductions phase out
Article Abstract:
There will be no deduction for personal interest after 1990 under the phase-out of interest deductions for non-corporate taxpayers. Taxpayers are faced with the decision on whether to pay off personal loans, for which there is no deduction, or making tax-free investments with the after-tax cost of debt service. Taxpayers with excess funds should retire existing personal loans unless the after-tax income of investments made with the funds exceeds the net of after-tax interest expense. Factors to consider when deciding on whether to retire a loan include: state taxes; loan prepayment penalties; and liquidity.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
User Contributions:
Comment about this article or add new information about this topic:
Tax-exempt income can minimize the effect of the catastrophic coverage tax
Article Abstract:
The potential taxation of a portion of Social Security benefits combined with the Medicare Catastrophic Coverage Act of 1988 has greatly increased the tax burden of taxpayers aged 65 and older. The combination of Social Security taxation and catastrophic coverage taxation results in a maximum marginal tax rate of 48.3% in 1989 and 53.76% in 1993 for a selected income range. The new tax regulations will also affect taxpayers investments in tax-exempt income vehicles. As a result taxpayers will have to carefully balance their Social Security benefits, and their taxable and non-taxable income levels.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1989
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Is the real interest rate stable? The purchasing power of money and nominal interest rates: a re-examination. Explaining forward exchange bias ... intraday
- Abstracts: Satisfying customer expectations: the effect on conflict and repurchase intentions in industrial marketing channels
- Abstracts: On stable factor structures in the pricing of risk: do time-varying betas help or hurt? The effects of beta, bid-ask spread, residual risk, and size on stock returns
- Abstracts: Task uncertainty and its interaction with budgetary participation and budget emphasis: some methodological issues and empirical investigation
- Abstracts: Replacing property that is converted can defer taxable gains. Selling a residence: current opportunities for deferring or eliminating tax on gain