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How does that work, mathematically? If you bought an asset and it appreciated you are liable for a tax on capital gains. If you donate this asset that simply el
by mynegation 6y ago
How does that work, mathematically? If you bought an asset and it appreciated you are liable for a tax on capital gains. If you donate this asset that simply eliminates the gain and the associated tax. But this is obviously a thing. Where am I wrong?
- ceejayoz 6y agoThe gain is fake. The tax benefit from the donation that is based on that fake gain is not. It’s like making a million dollars in counterfeit money, then donating that to charity. You reduce taxes by $370,000, and are out $0.
- xur17 6y ago> If you bought an asset and it appreciated you are liable for a tax on capital gains. If you donate this asset that simply eliminates the gain and the associated tax. But this is obviously a thing. If you donate an asset it eliminates the gain and the associated tax in addition to giving you a tax deduction in the amount of the donation. This is why people like to donate highly appreciated assets rather than selling the asset and donating the resulting funds.
- deleted 6y ago[deleted]