Donating Stock To Charity

Gary Klott has a good introduction to the concept of donating capital gain assets to charity.

However, this is a perfect example of where you should work with your tax advisor to crunch the numbers with your tax situation because there are far too many variables for there to be anything close to a one size fits all strategy.

For example, capital loss carry forwards should play a big part in a decision as to donating appreciated stock or selling it and reporting the gain. A few minutes ago, I finished an income tax return where there is a capital loss carry forward of over $68,000. That client can literally receive up to $68,000 of capital gains tax free in the next tax year; so a donation may not be the best approach.

KMK

Phony Figures

As I have explained on so many occasions, the numbers that are used by the media and our rulers in DC when discussing taxes and the Federal budget are treated as gospel; when in fact, they are completely fabricated using phony assumptions and other techniques that make Arthur Andersen’s tricks pale in comparison.

Here, Bruce Bartlett shows how such phony numbers have been used in the current discussion of the cost to the Feds of a permanent repeal of the estate tax.

It’s very revealing of the mindset of those in power that any portion of our own wealth that we are allowed to retain is considered to be a cost to the government. The implication of that is no different than in communist countries, where they are just slightly less subtle about the fact that everything belongs to the omnipotent central government.

KMK

Root of Big Government

Just because I don’t believe that the suspicious circumstances surrounding the ratification of the 16th Amendment justify refusing to file income tax returns, doesn’t mean I approve of the amendment. I have long supported that it be formally repealed.

As this article explains, the power it gave to our rulers in DC is directly responsible for the unconstitutional growth in the size, power and cost of our Federal government, all of which are completely at odds with the original intentions of our founding fathers.

KMK

Cooking The Books

I have mentioned several times how hypocritical it is for our rulers to be shocked by the creative accounting tricks coming to light from WorldCom, Enron, Xerox, et al. Here, Walter Williams explains how our rulers in DC are hiding more than $30 trillion of debt in much the same way as Enron was doing. Which scheme do you think affects more people in this country, Enron’s or Congress’s?

KMK

Current Extensions

Most people know that the extensions (Form 4868) they filed for their 2001 1040s expire on August 15, 2002. If you need more time, just send in Form 2688 by 8/15/02 and IRS will give you two more months (until October 15, 2002).

What often sneaks up undetected is the deadline for partnership, LLC, trust & fiduciary tax returns (Forms 1065 & 1041). The first extensions which were filed back before April 15 for these types of returns were only for three months. That means they will expire on July 15, 2002. Not to worry. IRS has forms to allow another three months of time (until October 15). Why the geniuses at IRS don’t make all extensions consistent (four months for the first and two months for the second) is a mystery.

If you need three more months for your 2001 partnership, LLC, or trust tax return, file Form 8800 with IRS by July 15.

If you need three more months for your estate fiduciary tax return (Form 1041), file Form 2758 with IRS by July 15.

2000 Tax Returns

Due to several personal emergencies, as well as computer virus & other problems, I am still behind in finishing off a number of 2000 income tax returns. I am trying my best to get them out ASAP. As I explained earlier, because of the current war, these aren’t officially delinquent until after October 15, 2002.

As always with the IRS, their right hand doesn’t know what their left hand is doing and they have been sending out erroneous late notices for 2000 tax returns. Those can safely be ignored.

KMK