If you donate 10% of 800k to a tax deductable ministry upon inheriting it?

Question

Wouldnt the deduction cancel out most of what you would owe on your federal income from the 800k total, when you go to file for that year? Or is there a cap on that sort of thing?

I should add that its from the sale of releastate which is owned by an LLC. Its not a straight out inheritance, since all the land is "owned" by all the siblings in the LLC.

Answer 1

PJ is right, there is a lot more information needed and you should sit down with a CPA to resolve this issue. The bigger issue for you may be how much of the real estate sale is taxable. If you inherited the LLC, your basis in the properties will be their fair market value, at the date of death. If they were gifted to you, the basis will be the givers basis. You will only pay tax on the amount they sold for above your basis. Hopefully, a CPA was helping the decedent with the taxes on the LLC and will have all the information you need.

Hope this helps.

Answer 2

Inheritances are not Income, and are therefore not taxable to the recipient.

You said it was an inheritance, now it changes to being income on the sale of property, and the property is owned by an LLC.

So, is the 800K your share, or the total amount realized on the sale? What was the LLC's Basis in the property? Who is giving the 10%, the LLC or one individual Member? Is it a straight up gift, or a gift in Trust?

You need a Tax Accountant, not Yahoo! Answers.

Answer 3

Go to www.irs.gov and you should be able to find your answers. Donations to charitable organizations are claimed on a Sch. A so that would come off of your income. Figuring your tax on the money would be a different form, like a Sch. D (capital gains). So, the donation would only lower your total income. Go to the website and do a search and you should find publications to explain it

Answer 4

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P.S. One who answered said all inheritance is NOT taxable. There is a cap to that limit, and after that it's taxable on the excess amount on federal income taxes. However, you may have state tax liability.

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Life insurance I hear is tax free, but check with a tax attorney. However, you say none is by life insurance in the update

Answer 5

Yes there are limits (20% up to %50). There is a lot that goes into that answer and you should seek the advice of a CPA in your state.

Answer 6

Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person the benefits are not taxable income and do not have to be reported. Any interest you receive would be taxable and would need to be reported just like any other interest received.