Donating Property For Charity? Know the Rules and Avoid Unpleasant Consequences!

If you donate a property to a qualified organization, the first question is how to decide the value of the donation. IRS says the fair market value at the time of the donation is usually the basis for deciding the value.

Donating household items:

You cannot claim a deduction for donating clothing or household items unless they are in good condition. Household items may be furniture, furnishings, electronics, appliances, linens. Food, paintings, jewelry and gems and other collectibles cannot be considered as household items.  If you are claiming a deduction for contributing an item of clothing or household item of the value of to $500, you can do so without much paperwork. Just keep the proof of purchase. If you want to claim deduction for a value of more than $500, you need to attach a qualified appraisal with your return. There are no norms for valuation of used clothes. However the fair market value of such used clothes or personal items is normally much less than the price you paid for them.

Donating a vehicle         

You can donate cars, boats or even airplanes to charitable organizations. However, if you are claiming a deduction of more than $500, you should have paperwork for the fair market value of the vehicle on the date of such donation. You must also attach to your return a copy of Form 1098-C which you have to receive from the organization. Remember, you cannot claim the deduction without attaching this form. 

If the charitable organization sells the vehicle to a needy individual at a price well below the market value, you can deduct the fair market value of the vehicle at the time of making such contribution. Let us take an example. If you bought a used car for $10,000 two years ago and now you donate it to a charitable organization, you should refer to the used car guide for finding the fair market value of the car. If the fair market value is $6000, you can claim a deduction of that amount. However if the organization to whom you have donated this car gives a Form 1098-C showing that the car was sold for only $3000, you can claim deduction of only $3000.

If you donate a boat, the valuation should be based on an appraisal by a marine surveyor. For cars, you can use trade publications or car pricing guides commonly called ‘blue books’. They are not official publications but they can provide clues for a proper appraisal.

Donating taxidermy property

If you donate taxidermy property to a qualified organization, your deduction will be the basis in the property or its fair market value whichever is less. The basis for this purpose includes only the cost of preparing, stuffing and mounting the property. The basis does not include transportation or travel costs. It also does not include cost of hunting or killing an animal and the cost of preparing animal for taxidermy.

Usually, you cannot claim a deduction for charitable contribution of less than your entire interest in the property. So if you want to donate a right to use the property, which is obviously less than your entire interest in that property, you cannot claim such donation for a deduction. So if you own a building and wanted to donate rent-free use of one floor of it to a charitable organization, you cannot claim any deduction as you are donating a partial interest.

If you donate a property with its fair market value less than your basis, you can claim deduction only of the fair market value.

Mind the severe penalties

If you overstate the value or adjusted basis of donated property, IRS can levy a penalty of 20 per cent of the amount by which you underpaid your tax. However if you have underpaid your tax by more than $5000 or the value of the property claimed in your return is 200% more than the correct amount, you are subject to 40 per cent penalty.

So ensure that you should not pay penalties for donating!

Lease Your Internet Space and Build a New Business

When we talk about leasing, Wikipedia defines it as follows, “A lease is a contract conferring a right on one person (called a tenant or lessee) to possess property belonging to another person (called a landlord or lessor) to the exclusion of the owner landlord, and all others except with the invitation of the tenant.

It is a rental agreement between landlord and tenant. A lease should be contrasted to a license, which may entitle a person (called a licensee) to use property, but which is subject to termination at the will of the owner of the property (called the licensor). An example of a license is the relationship between a parking lot owner and a person who parks a vehicle in the parking lot.”

Talking in simple words, leasing is give your property on rent, it can be your land, your building, and now a days it can also be your website.

Leasing your website, can be strange enough to catch your eyes..!

The very first question arises, how on earth can you lease your website or your internet space? It’s the very same reason I thought that I write an article for.

Let us discuss, what involves leasing your web space.

First and the foremost thing is having an idea, a real business idea. You need to identify such a niche of business which can give you the desired authority over that space. In simple words, if you want your web space to be worth a lot, then you need to create authority for it. You need to make it worthy. So the first foot forward would be selecting an appropriate business around which you can bank you web space.

Next you should select a domain name. I would suggest that you buy around 50 domains and use the same webpage on them. You can do that easily, I would tell you how to do it.

Next involves designing a simple and lucid webpage about that business. I would suggest that you make a website with a few pages, with all information about the business idea right on the home page. You need not be a professional designer or a developer to make a website. I would suggest you tools to do that. Take no worries!

Next you need to make you website visible at prominent places like search engines and social media. This is a simple step by step task, defines in a lucid manner in my System.

Once you start getting traffic, you are sitting on your rocket, ready to be fired. With time you will get many visitors and the authority or your webpage would increase.

The authority of your webpage would automatically attract prospective business guys of that niche. It would then be very easy for you to lease your net space.

More the authority of your web space more would be the leasing cost. This is how I have made money for myself to ride a Ferrari.

About Risk Management and Asset Protection

Risk management other than being regarded as one of the most important business tools also plays a big role in the life of everyday consumers. Predicting risks and taking necessary actions for eliminating them are important for consumers as well as business owners. This article will educate you about different facets of risk management and will also provide information on asset protection, one of the most effective ways of managing risks associated with real property.

Let us begin the discussion by explaining what risk management actually is. It is basically a process that businesses use for identifying risk, assessing its impact on the company’s performance and creating business strategies or financial plans for preventing ill-effects of the identified risks. Risk management holds a significant position in almost every realm of business. Thus you should learn about this special business tool irrespective of the type of business you own.

Businesses use different kinds of strategies or methods for assessing risks involved in their daily operations. They may do so by performing thorough research on rival companies to find out the kinds of mistakes they have performed and how they have managed to prevent those mistakes from hindering the company’s overall performance. Some companies, on the other hand, analyze market trends for gauging whether consumers will like to spend more or spend less in the future. Market trend analysis is also often used for determining the kinds of consumer requirements that will compel spending during the coming years.

Now, let us discuss about asset protection. This tool is used by individual consumers as well as businesses for reducing the effects of risk on real properties like homes, business buildings and automobiles. Experts often refer to asset protection as a risk mitigation tool; this is because this tool successfully reduces the amount of harm the identified risks can cause to the property of the consumer or business owner.

The asset protection type that is used most frequently by consumers and businesses is insurance. You can use insurance in different forms for protecting your assets. You should pick the insurance type depending on the kind of property you want to protect; for example: for protecting your home, you should opt for homeowner’s insurance, for protecting your business building, you will need to buy business insurance and for protecting your vehicles, you will need auto insurance. Insurance policies can also be categorized based on the type of coverage they offer. There are too many options to choose from; thus you should always consult an experienced financial adviser before making any decision.