Wednesday, February 1, 2012
Whenever I see articles in the popular press on tax or charitable issues, I'm torn. On the one hand, I want to read them because it's important to know what the general public hears about such issues in order to able to advise about or teach them appropriately. On the other hand, the tax geek runs strong in me, so the technical errors one finds in such articles drive me absolutely bananas. And so, with great trepidation, I clicked the following link over my first cup of coffee of the morning:
The first few paragraphs were fine, until...
To lessen their tax burdens, the new Facebook millionaires could contribute some of their stock to a donor-advised fund, a type of public charity that serves as an umbrella giving vehicle. They could also set up a "charitable remainder trust," whereby a chunk of money goes to a charity after a specified time – like upon death – but the donor receives income or interest off the donated assets. In both cases, the donor can avoid capital gains tax and might also be eligible for an income tax deduction. (Emphasis added).
Really. REALLY? In search of an audience, I stormed into the living room and nerd raged at my unsuspecting husband, complete with indignant finger pointing, "HOW MANY TIMES do I have to tell people that CRTs do NOT allow you to avoid capital gains tax, only to defer paying it!" He blinked, and asked me if I needed more coffee. I wandered back to the computer, muttering something about the time value of money and retention of character of income.
I feel better now, though. EWW