Charitable giving ranks as the noblest of tax deductions. Whether we donate food, clothing, cash or a vehicle that has outlived its sell-by date, the IRS will reduce our income to a more tolerable taxable level, so long as we itemize our giving on Schedule A, preserve documentation for gifts more than $250 and donate to a qualified tax-exempt organization.
But a Texas CPA recalls one client who proved that even with charitable giving, everything is bigger in Texas.
"I had a client who had purchased an old building in order to acquire the lot so he could turn it into a parking lot," the CPA recalls. "The building had a huge smokestack attached that had become a local landmark. The city said that, if he would leave the smokestack standing and deed it to them, they would consider it a charitable donation."
Much to the developer's surprise, they weren't just blowing smoke.
"He gifted that smokestack to the city, and the IRS accepted it as a donation in excess of $100,000," the CPA says. "And because there is a limit on charitable donations, his gift resulted in a carry-over."
The gift that keeps on giving, Texas style.