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I never understood how this works. If you donate $X to charity, you reduce your taxable income by $X but now have $X less. If you paid your tax on $X, you would
by xtreme 9y ago
I never understood how this works. If you donate $X to charity, you reduce your taxable income by $X but now have $X less. If you paid your tax on $X, you would still have $X-Y. How can the former approach save you any money?
- simonsarris 9y ago> If you donate $X to charity When $X is $REAL_LIVE_MONEYDOLLARS, yes. When $X is $ARTWORK_THAT_I_CLAIM_IS_WORTH_10M, which I bought for not 10M but 1M, but got "appraised" at 10M, what did I just do? Pay $1M for $10M of tax writeoffs.
- coldtea 9y agoOr, you know, you can get your friends running the charity to accept 1/N * $X, but ascertain they accepted $X from you (e.g. by giving you back the rest through various channels). Even better, the charity is run by some politician's friends or relatives, and you pay $X indeed, but you're basically buying several favors (plus special cuts and treatment that's worth more than 10 * X).