Parthian shot. If a gift is held to be earmarked for an individual, not only does the donor lose the income tax charitable deduction, but also could be subject to the federal (and possibly state) gift tax on transfers to individuals (assuming it exceeds the $14,000 per donee annual exclusion).
ExceptionThe recent slaying of five Dallas police officers recalls a legislative exception to the earmarked-charitable-deduction-denial rule.Cash gifts made for the exclusive relief of the families of two slain New York police officers were allowable 2014 deductions if made between Jan. 1 and April 15, 2015.The law provided that the gifts were deductible even though the contributions were made to organizations that specifically benefited the families of Detectives Liu and Ramos.7
Source: Earmarked Gifts
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David R. Duringer, JD, LL.M, is a concealed firearm instructor and tax lawyer specializing in business and estate planning; licensed to practice law in the states of California and Washington. He is managing shareholder at Protective Law Corporation, serving Southern California from its Laguna Hills (Orange County) headquarters and satellite offices in San Diego County (Coronado and Carlsbad).
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