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18 TAX PLANNING DAYS LEFT!

December 13, 2002

Holiday giving season inconveniently interferes with year-end tax planning. Fortunately, we can combine aspects of both with charitable giving. Some thoughts on year-end contributions for your stocking:

-STOCKS AND BONDS. Appreciated publicly-traded securities make a great charitable gifts. If you have held such stock for over one year, you may deduct charitable gifts at the market value on the date of the gift - while never paying tax on the appreciation.

-APPRAISAL REQUIREMENTS. Charitable gifts of appreciated property other than publicly traded securities held for over one year may also be deducted at fair market value. The catch: if the value of the gift exceeds $5,000, you will need an appraiser to sign Form 8283, which must be attached to your return. This rule applies even if the property would seem to be easily valued, like a life insurance policy or a used car. There is no gray area here; no appraisal, no deduction.

-SUBSTANTIATION. The tax law now requires taxpayers to posses written acknowledgment of individual gifts of $250 or more before the taxpayer can claim the deduction; a canceled check, by itself, will be inadequate. If the acknowledgment is not received before the return is filed, the deduction is lost.

-PLASTIC. Charitable contributions charged to your credit card by December 31, 2002 are deductible this year, even if the credit card bill isn't paid until after year-end.

-ITEMIZERS ONLY. Charitable gifts are deductible only for taxpayers itemizing deductions.

-CHARITIES ONLY. The IRS website has a special section to help you determine whether an entity is eligible to receive deductible gifts.

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