<NOSPAMdave[at]sebastian9.com> wrote:

- quote -

Since you brought my name up, let me just say that I would
consider a $30 item to be just as immaterial as a $3 item.
As a matter of practicality, I tend to consider
"questionable" deductions of under $100 as not being worth
the time to worry about. Others may disagree; it's a free
country.

MTW

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Moderator: I need to read submissions more carefully as too much
sarcasm is getting past me. After this post, this
thread is closed.


- quote -

Because it was irrelevant to answering the actual question I
asked ("Is this expense a valid charitable deduction?").
It's only relevance is to this drifted discussion on why
you don't want to answer the original question, which is
when I brought it up. The same applies to the state tax
aspect below (it addresses only the value of the deduction, not
the validity of it).

- quote -

At today's interest rates? I'm currently getting 0.22% on a
money market, and around 1% on regular savings. If I use one
of those for my discount rate, it hardly makes a difference over
a ten-year time frame whether I use discounted or nominal figures.
At a 1% discount rate, the NPV of that $36.80 drops to $35.20.
You have to go with a 5% discount rate to get the NPV down to $29.84.
Admittedly, for a 10-year horizon, longer-term interest rates
are more appropriate, and they're a bit higher than current passbook
rates, but they're not so much higher that it makes much difference.

In any case, the point isn't the exact amount, but that it's not
necessarily just the $3 question you were dismissing it as.
You and Michael felt free to make assumptions to minimize the importance
of the question - I'm just pointing out that different assumptions
can make it worth a bit more than that.

- quote -

When you're talking about how much something is worth to *me*, I think
my opinion is kind of relevant, no? And I suspect that many people
would share in the opinion that a $30 issue is a little less trivial
than a $3 issue, which is all I'm claiming here.

- quote -

If you have a bunch of MA clients and there's some special advantage to
giving that way instead of directly, I would think you might want
to mention it to them if they were unaware of the option, sure.
How much effort you want to spend on your tax advice is up to you.

- quote -

Only as much time as you want to. By posting here, I was hoping
that the lowest-cost provider (e.g., someone who already knew the
answer and was willing to share) might answer for all of us,
thus providing maximum collective benefit at the minimum collective
cost. By putting the issue in a broader context, I'm just pointing
out that there might more benefits to your clients from you knowing
the answer than the specific question itself might suggest (and, perhaps,
increasing the probability that someone knows relevant info
from a related question).

But how much time you want to spend on improving your possible
tax advice, and where you judge that time is best spent, is entirely
up to you. If you consider that even the broader issue isn't
worth spending time to research on your own, I have no quarrel
with that. Perhaps someone else will feel differently, and be willing
to share their results.

--
Dave Wallace (Remove NOSPAM from my address to email me)
It is quite humbling to realize that the storage occupied by the longest
line from a typical Usenet posting is sufficient to provide a state space
so vast that all the computation power in the world can not conquer it.

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<NOSPAMdave[at]sebastian9.com> wrote:

- quote -

I guess my reaction is that if it is not "material" with
respect to any of the clients taken individually, then the
fact that it ~might~ become material if you added a group of
clients together doesn't particularly "phase" me.

This is sort of like asking, "What if there was a $1.00
error in the tax tables?" The fact that it might add up to
millions of dollars across the country isn't going to cause
me to spend any time worrying about it on a case by case
basis for my clients.

Issues of "macro" significance are probably best addressed
"politically."

MTW

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- quote -

Not exactly. For one thing, this is a recurring issue.
The cost to actually take the deduction in a given year
is trivial - it's just one line in a spreadsheet that
eventually adds up to line 15 of Schedule A. Checking
that it's a valid deduction only needs to be done once.
So over a 10-year period, let's say that the deduction
is worth around (27.5% (fed) + 9.3% (state))*10*$10 = $36.80.

That's still not enough to spend a lot of effort validating,
but it's a little less trivial than you suggest.

Now let's look at it from a paid preparer's perspective
for a moment. Let's say you have 50 clients who
give to charity and itemize deductions, and that the
above brackets are typical for them. If you
could validate this deduction, you could advise them
how to collectively save $1,840 off their taxes over the
next ten years, while benefiting the charities they
support by (presumably) quite a bit more than the $5,000
in fees they would collectively pay to register.
Does that start to get up to the level where you consider
it worthwhile to do the research on your own, or do you need
a single client who is willing to pay for all the research?

Of course, I expect your estimate of the probability that
the deduction will be found to be valid influences your
decision as well.

Both of my specific questions are examples of payments to
third parties for the benefit of a charity. If there
is a general rule about the deductibility of such payments,
I expect it would have broader application than just these
two examples. Does that make the issue seem more significant?

--
Dave Wallace (Remove NOSPAM from my address to email me)
It is quite humbling to realize that the storage occupied by
the longest line from a typical Usenet posting is sufficient
to provide a state space so vast that all the computation
power in the world can not conquer it.

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- quote -

What about a calculator? At the absolute most, assuming
everything was calculated to the penny, you're looking at an
issue worth AT BEST $3.86. I think that was his point,
which you missed.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.

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<NOSPAMdave[at]sebastian9.com> wrote:

- quote -

That is VERY TRUE and I often point that out to clients and
prospectives.

- quote -

That's also true. Only the overwhelming majority of people
with taxable incomes of less than $100,000 are allowed to
use the tables. And, indeed, if you are sitting right on the
"cusp" of a bracket, even a reanalysis of your "rounding"
strategy can easily have an impact on the bottom line.

But, you are talking about the "exceptions" to all the
rules, not what is most likely or probable. If you enjoy
spending your time pursuing this kind of thing, that's
great, just like I enjoy spending my time telling people
that they are wasting their time. <g
MTW

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According to Michael T Wing CPA <mtwingcpa[at]yahoo.com> :
- quote -

No more than you are willing to voluntarily contribute out
of the goodness of your heart for the education of others,
just like any other contribution in this newsgroup. If you
don't know the answer off the top of your head, then perhaps
someone who does know will take a moment to educate us both.
Or perhaps not - maybe everyone in that position is
currently swamped getting extended returns done for paying
clients before the 15th.

I have no standing to demand an answer from anyone here. I
merely pose the question, and hope that someone
knowledgeable finds it interesting enough to answer.

- quote -

1. Not everyone uses the tax tables, you know. For those
that do, the size of those brackets means that any small
change that *does* push you over a boundary can have a
disproportionate effect on your tax bill.

2. One of the advantages of being self-prepared is that I
can afford to go after some small deductions that might not
be worthwhile if I had to pay someone to chase them for me.
One of the disadvantages is that I have no other clients to
share the cost of research. So it's not worth a lot of
effort to me to answer this particular question, but it's at
least worth a few moments to see if anyone else knows the
answer and is willing to share.

- quote -

Dave Wallace (Remove NOSPAM from my address to email me)
It is quite humbling to realize that the storage occupied by
the longest line from a typical Usenet posting is sufficient
to provide a state space so vast that all the computation
power in the world can not conquer it.

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NOSPAMdave[at]sebastian9.com wrote:

- quote -

This doesn't sound like a charitable contribution to me.
The $10 isn't going to the charity you designated, it's
going to Escrip, who I presume is not a charitable
organization. It's a service fee you're paying them to
coordinate the process. The charity is benefiting
indirectly, but I doubt you'd be able to deduct it.

I'm not a lawyer or tax professional, but this just doesn't
smell like a charitable contribution.

--
Barry Margolin, barmar[at]alum.mit.edu
Level(3) Communicaions, Woburn, MA

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<NOSPAMdave[at]sebastian9.com> wrote:

- quote -

If you were a client of mine, I would be charging you about
$2.50 per minute to consider this question. How many minutes
do you want me to spend on your $10 problem?

If you find that answer to be too arrogant for your liking
<g> , consider that the brackets in the tax tables are
generally in $50 increments. This means that any item of
less than $25 has less than a 50-50 chance of making any
difference whatsoever in your tax liability.

Just trying to provide a ~reality check~. <g
MTW

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1. Escrip (escrip.com) has a program where we pay a $10
annual fee, register a bunch of credit cards/grocery
discount cards with them, and then various merchants give a
percentage of our purchases made with those cards to a
charity we designate. Our payment of this annual fee is
solely for the benefit of the designated charity -we get no
benefit from registering other than the knowledge that our
shopping now benefits the charity. Is the fee deductible as
a charitable contribution, assuming that the designated
charity otherwise qualifies?

2. I recently sponsored my nephew (on the other side of the
country) in a charitable fund raiser at his school. Due to
a mixup over when the pledges were due, I wound up having my
brother-in-law pay for my pledge so my nephew could turn his
checks in on time, and then I wrote a check to my
brother-in-law to reimburse him. Who, if anyone, gets the
charitable deduction here? Me, for being the ultimate
source of the funds, my b-i-l, for writing the actual check
to the charity, or neither of us? The amount is not large
enough to require a receipt from the charity.

--
Dave Wallace (Remove NOSPAM from my address to email me)
It is quite humbling to realize that the storage occupied by
the longest line from a typical Usenet posting is sufficient
to provide a state space so vast that all the computation
power in the world can not conquer it.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->