3 ms·
For the sake of argument, assume a flat 20% tax rate for a minute. Scenario A: Your taxable income is $1,000,000. Your tax liability is $200,000. You pay your
by bitcurious 5y ago
For the sake of argument, assume a flat 20% tax rate for a minute.
Scenario A: Your taxable income is $1,000,000. Your tax liability is $200,000. You pay your taxes, you net $800,000.
Scenario B: Your taxable income is $1,000,000. Your tax liability is $200,000. You donate $200,00 to charity. Now your taxable income is $800,000 and your tax liability is $160,000. Your net income is $640,000.
The only scenario where a charitable contribution doesn’t lower your overall income is
Scenario C: you commit fraud.
- rattray 5y agoScenario D: You donate $800,000 to a foundation you control. Your net income is $960,000 ($160,000 cash and $800,000 with some strings attached).
- kristjansson 5y agoIf they cut a string, or even pull on one a bit too much, they’re right back at C.
- zentiggr 5y agoAssuming anyone can get the AG to actually investigate, file charges, and get a conviction. Notoriously more difficult as the amount of financial leverage increases.
- justanotherguy0 5y agoYou're forgetting that you can donate appreciated assets for their market value without realizing the capital gains as income.