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Tax Moves for the last day of 2009

December 31, 2009

There are only a few hours left in 2009. Still, it's enough for a few year-end tax planning moves, if you hurry!

Capital losses: If you sell stock at a loss today, you can take the loss. You can deduct capital losses to the extent of capital gains, plus (if you are an individual) $3,000. This doesn't work for short sales, which are considered closed on the settlement date, rather than the trade date; also, beware the "wash-sale" rules.

Live another day. If you survive today, but not tomorrow, you may avoid estate tax altogether, assuming you have enough assets to worry about the estate tax.

Or don't. If your estate is under $3.5 million, maybe this is a good day to check out. Your estate will be too small to pay estate tax, but your heirs will benefit from a step-up in the basis of your assets to their date-of-death value.

Remember, the official position of the Tax Update is that there's no good day for dying.

You also have time to make some charitable contributions, either by getting the check in the mail today or by using your credit card. If you are feeling charitable, but you don't know what to do, here are some charities that I like:

Salvation Army

Iowa Donor Network, the Iowa organization that gathers and allocates donor organs.

Cornell College

Southern Illinois University

The Tax Foundation

Reason Foundation

Alzheimers Association

Sertoma Foundation

And don't forget that TaxGrrrl is running in the Komen Race for the Cure. Sponsor her, or make a donation.

Update from the comments:

International Development Enterprises. All money donated to them goes towards developing techonology suitable for poorer countries, which is then sold in the free market. Water pumps, water purifiers and so on. Free market and by design self sustaining, as people have to choose to buy it.

Also, the Center for Agricultural Law and Taxation does a wonderful job. Unfortunately, they don't have an online credit card donation page (ahem, Roger!).

If you want some more ideas, Kay Bell has a roundup of year-end tax moves.

This is the last of our 2009 year-end tax planning tips. See you next year!

Tags: Tax Policy Blog.Tax.com.TaxGrrrl.year-end tax planning.

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