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Charitable Deductions For Helping Someone Buy Your Home?
According to this press release from the Feds, Partners In Charity is falsely advertising that home sellers can claim charitable donation deductions for amounts they reimburse the charity for their buyers’ down payment assistance. As any tax pro knows, one of the requirements for a valid charitable donation deduction is nothing of value being received back. This kind of arrangement would obviously fail that test.
I went to the PIC website and tried to find that claim; but couldn’t. It may have been removed after the Feds’ complaint or the complaint may be based on other marketing materials used by PIC and its representatives, including verbal promises.
Some people may be wondering why a charitable donation deduction is better than just claiming the reimbursement as a normal selling expense and thus reducing the gain on the sale. The reason is that, for most home sellers, their entire profit is already tax free under the current rule that exempts up to $250,000 of gain per person ($500,000 per couple).
- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/08/2005 04:10:00 PM Send this post:
