[Following up my own posting]
Joe Morris <jcmorris[at]mitre.org> writes:

- quote -


Yesterday's (12 January) Wall Street Journal had an article
on this subject that noted a couple of items I didn't
include in the posting, one of which I was aware of, and one
I hadn't caught:

1) The ability to deduct a January 2005 donation against
your 2004 income is absolutely limited to cash, or cash
equivalent contributions. Real money, checks, or credit card
payments qualify, but (for example) stock certificates,
goods, or services do not. If you want to contribute
appreciated stock, that's fine...but you cannot carry it
back to 2004 even if the gift is completed in January.

2) According to the article, a qualified donation in January
2005 may be taken against *either* 2004 or 2005 income --
taxpayer's choice. If a taxpayer would gain no benefit from
carrying it back to 2004 (for example, if s/he will be using
the standard deduction on the 2004 return) there is no loss
of deduction by making the donation in January 2005.

Joe Morris

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It's law! It only includes the usual U.S. charities who are
501 (c)(3), etc.

New Tax Law Encourages Tsunami Relief Contributions

AccountingWEB.com - Jan-12-2005 - The Internal Revenue
Service alerted taxpayers who itemize deductions that they
may claim on their 2004 tax returns charitable donations
made during Jan. 2005 for relief of the victims of the
Indian Ocean Tsunami.

The new law enacted on Jan. 7 allows these donations to be
deducted as if they were made on Dec. 31, 2004.

There are no extra forms to fill out or any additional
burdens for taxpayers," said IRS Commissioner Mark W.
Everson. As long as you send your check by the end of the
month, the donation will be treated just like it was still
2004.

The new law only allows for cash contributions. The
contributions must be made specifically for the relief of
victims in areas affected by the Dec. 26, 2004, tsunami in
the Indian Ocean. The new law gives taxpayers the option of
deducting the contributions on either their 2004 or 2005
returns, but not both.

The IRS advises taxpayers to be sure their contributions go
to qualified charities. Taxpayers who have a specific
charity in mind can make sure that it is a qualified charity
by doing a search on IRS.gov. Some organizations, such as
churches or governments, may be qualified even though they
are not listed on IRS.gov. Donors can find out more about
organizations helping the victims of the tsunami from
agencies such as USAID and USA Freedom Corp.

The IRS reminds donors that contributions to foreign
organizations generally are not deductible.

IRS Publication 526, Charitable Contributions, provides
information on making contributions to charities.
Publication 3833, Disaster Relief: Providing Assistance
through Charitable Organizations, explains how the public
can use charitable organizations to help victims of
disasters, and how new organizations can obtain tax-exempt
status. Both publications are available on IRS.gov.

When donors make contributions to assist the victims of the
tsunami, they should notate their records to that effect.
Donors may want to notate the memo field of checks they send
that it is a contribution to help tsunami victims.

Copyright 2005 - All Rights Reserved

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Joe Morris <jcmorris[at]mitre.org> wrote:

- quote -

Most charities provide a way for you to earmark
contributions for a particular purpose. For instance, when
you donate to a college, you can select the unrestricted
fund, various scholarships, departments, etc. In the online
cases, I'd expect most of them to have a menu of purposes,
with an "Other" case that allows you to type the purpose
into a text box.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

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- quote -

Perhaps this post was made and wasn't approved for "posting"
on the NG and got stuck for a couple of days, but President
Bush indeed DID sign off on this (1/7/2005) 2 days before
this post hit , at least, my newsgroup server (1/9/2005).
So it's more than a desire.

See http://www.whitehouse.gov/news/relea...0050107-9.html .

But now that he did, does this mean is is now a law, or is
there anything else that needs to happen?

--
Regards -

- Andrew

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hrblockhead14[at]aol.com (Hrblockhead14) writes:

- quote -

[I'll assume that you meant "foreign"]

- quote -

It was signed by Dubyh last week.

- quote -

Answering the question on the first line: no.

As I read HR241 the rules are that a donation to a charity
that would be eligible for deduction on your 2004 had it
been made prior to 1 January 2005 is now deductible against
2004 income if (a) made prior to 1 February 2005, and (b) is
for the tsunami relief operations.

A contribution to a foreign charity is not deductible...and
there is a nasty tax trap for people who contribute to the
foreign arms of organiztions which also have domestic (i.e.,
eligible) compnents. The International Red Cross, for
example, is an ineligible donee, but the American Red Cross
is eligible even though the donation may wind up being used
for the same purpose. See IRS Publication 78 to identify
charities to which donations are deductible (the IRS web
site has a nice lookup application to help you look up a
specific charity's name).

I'm not a tax expert, so here's a related question to the
profesionals in this forum: what is the appropriate way to
document that a donation (especially one made online) made
in January 2005 was directed to the tsunami relief effort?
Note that at least one eligible charity (Doctors Without
Borders) states on its web site that it does *not* need
additional contributions for its tsunami effort.

Joe Morris

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- quote -

I believe that the Bill specifies that the contributions be
made through a US-based charity, and not directly to any
individual or organization not controlled by a US charity.

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Would donations to foreing Charities Qualify ?

- quote -

--

HR 241 has now been passed by both House and Senate. It
awaits the President's signature. It's not law yet, but it's
getting close.

This bill would allow cash donations made in January of 2005
for Indian Ocean disaster relief to be treated as if they
had been made in 2004 at the election of the taxpayer.

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