Have you ever had one of those times in your life when just everything worked? I don’t know about you, but I just hang on to those times in my mind because I want to recreate them again, and again.
One of those special times was at the March 2008 San Diego Advanced Pre-emptive Tax Strategy Training. It was the perfect combination of brand new, cutting edge strategies, enthusiastic mastermind sessions and best of all, people who wanted to learn and help each other take massive action to make more money and pay less tax.
Today, I want to tell you about 10 tax-saving tips that have never been disclosed outside the Advanced Pre-emptive Tax Strategy Training. These are just 10 of the hundreds of secrets that we covered in this unique, one of a kind 3 day event. In fact, as I go through the simple steps it takes to get even more in deductions than you thought possible, I suspect that you might want to sign up for the next Advanced Pre-emptive Tax Strategy Training so you can learn these strategies first hand. But, the problem is that I can’t let you do that. That’s because every event is different and once I’ve given the program, I never do it again.
In a bit I’ll tell you about a way that you can learn about these hundred of tax secrets. But, first I want to get started by talking about 10 secrets to get more than you thought possible from your charitable donations.
10 Tips for Getting the Most Out of Charitable Donations
TIP #1: Donate Appreciated Objects The general rule is that you can deduct the full fair market value of the donation as of the date of the contribution. This is not the BASIS (what you paid for it), but the current fair market value. Now, how do you take advantage of that? Read on for the strategies that the rich use for buying appreciating assets, such as artwork, waiting for one year, and then taking a deductions for 10 times or more what they paid.
TIP #2: Donate Long-Term Capital Gain Objects The amount you can deduct for a contribution of ordinary income property is generally only your basis (cost) in the property, not the full fair market value. Property is ordinary income property if its sale at fair market value on the date it was contributed would have resulted in ordinary income or in short-term capital gain. Examples of ordinary income property are business inventory, works of art created by an artist donor, manuscripts prepared by the donor, and capital assets held one (1) year or less.
Now this is the important part: The deduction for appreciated long-term capital gain property is its full fair market value., while the deduction for ordinary income property is the lesser of fair market value or its basis.. You need to hold the property for at least one year and one day to take advantage of the full amount of the fair market value. And that’s a very important distinction if you’re planning to donate that has appreciated in value, like artwork.
TIP # 3: Donate to a Public Rather Than Private Charity In order to maximize your charitable deduction benefits, the qualified organization must be a public, not private, charitable organization. In general, qualified public charitable organizations include nonprofit groups that are religious, charitable, educational, scientific, or literary in purpose, or that work to prevent cruelty to children or animals. You can ask the organization whether it is a qualified organization, and most will be able to tell you.
In most cases, you will only receive a deduction of your cost for a contribution of appreciated art objects to a private charity. However, that same donation would be allowed a deduction of the full fair market value if the contribution was made to a public charity that meets the “related use rule.”
TIP #4: Make Sure the Public Charity meets the “Related Use Rule” The “related use rule” applies to capital gains property that is tangible personal property (objects) contributed to a public charity. The related use rule requires that the use of the art object by the organization be related to the purpose or the function constituting the basis for the organization’s charitable exemption under IRC Section 501. This means that the donated object must be of a type normally retained and exhibited by that charitable organization, such as a museum or educational institution that normally has a collection of similar paintings, or silver, or sports memorabilia. If the charity doesn’t meet the related use requirement, all of the appreciated value of the donated art object will be lost as a charitable deduction. Here are three examples:
Example: You purchased a painting by an unknown artist for $1,000.00 two years ago. It has appreciated over the past two years. You obtain a qualified appraisal by a qualified appraiser. The fair market value on April 1, 2008, the date of your donation, is appraised at $15,000.00.
Donation #1: You donate the painting to a private charity. You will only be able to receive a deduction for your cost, $1,000.00.
Donation #2: You donate the picture to a public charity, but the charity’s charitable exemption purpose was unrelated to the donated painting. You will only be able to receive a deduction for your cost, $1,000.00.
Donation #3: You donate the painting to a public charity, and the use of the sculpture by the organization is related to the purpose or the function constituting the basis for the organization’s charitable exemption. (It is an art museum with a collection of similar type paintings). You will be able to receive a deduction for the full fair market value of the sculpture as of the date of donation, $15,000.00.
TIP # 5: Verify Acceptance of the Donation by the Qualified Organization Make sure the designated public charity wants the object. The organization should provide a written acceptance indicating that the organization is a qualified public charity, and that it satisfies the related use rule regarding the particular donation and intends to use the gift in a manner related to its tax exempt status.
At this point, you might already begun to see the business opportunities and tax deductions available in this little used loophole. There are a few companies who take advantage of this loophole by representing artists that they feel are “up and comers”. They broker sales to high income people who need the write-offs. The wealthy buyer then waits at least a year, gets a new appraisal and donates the piece to a museum. The museum showcases work by the artist (and because it is so quickly rising in value, it’s interesting to them) and it feeds even more interest in the artist. Her works sell for even more this next go round and the values continue to go up.
Suddenly a tax loophole became a whole new way to make money!
Now, even if you don’t care about art, never wanted to be an artist and don’t particularly want to go through the trouble of paying $1,000 to get a $10,000 tax deduction in a year, you’ve got to admit – learning about tax strategies that the super rich (and smart!) use can be very helpful to your own tax planning.
This past seminar was the first time I disclosed these secrets. And now, just released this week, I have the recording and manual for the course available. This is the only place that you can get these unique, cutting edge strategies. In just a few minutes, I’ll tell you about how you can get a copy of this rare recording, full of the secrets the rich use to pay less tax and maybe start a new business venture along the way!
But first, I want to tell you about a couple more advanced tax strategies using the same idea of contributing appreciated art work.
TIP #6: Consider a Partial Interest Donation In certain circumstances, a gift of a partial interest in an art object or collection might work better for you. For example, you could donate a percentage of ownership of a painting, while retaining the remaining portion of ownership for yourself, with the promise that full ownership will ultimately go to the charitable organization at a future date of your choice, such as upon your death. In cases like this, the receiving charitable organization would retain possession of the painting based upon its percentage of ownership. If a gift of a one-third (1/3) interest was given, and you retained the remaining two-thirds (2/3) interest, then the charitable organization would have possession of the painting for four (4) months of each year, and you would have possession of the painting for the remaining eight (8) months.
Have you ever noticed the “on loan from Mr & Mrs Gotrocks” placards at the local museum? This is the strategy that the Gotrocks are doing! They are donating a partial interest in the artwork, for a huge tax deduction, and for a few months out of every year their artwork travels.
TIP #7: Consider a Charitable Bargain Sale A bargain sale of personal property to a qualified charitable organization (a sale or exchange for less than the property’s fair market value) is partly a charitable contribution and partly a sale. With the bargain sale, you sell your art object or collection to the charitable organization at less than fair market value. The transaction gives you some cash, plus a charitable income tax deduction for the difference between the fair market value of the gift and the amount the charity paid you. Generally, if the art object sold was capital gain property, your charitable contribution is the fair market value of the contributed portion. The bargain sale is the only donation plan that can give you both a lump sum of cash, and a charitable deduction.
It’s interesting to see how once a new loophole is discovered, all the different techniques come out on ways to maximize it. That’s what I’ve done in Advanced Pre-emtpive Tax Strategies. In this audio course, you’ll find 23 modules jam packed with unique tax tricks just like this plus the best way to combine your tax program with your estate planning. You’ll learn about the 33 things you MUST avoid to stay off the IRS watch list, how to avoid making a HUGE mistake with your Family Limited Partnership, and how to turn active income into passive income, for tax free cash flow – just like the rich do.
You’ll also receive a 140+ page workbook to follow along with all the tax strategies you’re going to learn. This is what one participant said about the course, that is now being offered to the public in a recording for the first time ever:
“This felt like Christmas morning – I received so many great ideas that felt like gifts. I went back to my room afterwards and turned over each new idea. It was like many Christmas gifts that will keep on giving. Truly a tremendous, inspiring event….thank you, thank you, thank you!”
Here’s the best part. All of this information is yours for just $399. Just one of these strategies could save you thousands of dollars and you’ll get hundreds of them in this course. Plus, if you are one of the first 50 people to buy this course, we’ll throw in “Basics of Pension Plan Investing” one of the hottest new investment strategies going. It’s a 9 module course, outlining exactly what you need to do to invest your pension plans into real estate, stocks and business. Plus you’ll find out what you need to avoid to keep the plan safe from IRS prohibited transactions. This course is available for $99, but I’ll include it as a bonus for the first 50 people who go to Advanced Pre-Emptive Tax Strategies to purchase this entire program.
But if you’re one of those people who want even better deals, then you’ll want to go directly to the deluxe Tax Power Package. If you want to decide WHEN and HOW MUCH you pay in taxes, then this is the home study course for you.
The Tax Power Package includes: Tax Literacy, Level 1 ($199 value) Tax Literacy, Level 2 ($299 value) Advanced Pre-emptive Tax Strategy ($399 value) Basics of Pension Plan Investing ($99 value)
That’s a total of almost $1,000, but if you act now I’ll give it ALL to you for just $498. You must be one of the first 20 to order the Tax Power Package to take advantage of this special price.
TIP # 8: Retain a Qualified Appraiser to Prepare a Qualified Appraisal Contributions of art objects and other personal property are reported on IRS Form 8283, Section A, for all contributions for the year over $500.00. For deductions of art objects and other personal property over $5,000.00, Form 8283 Section B must be completed. This is signed by the donor, the donee and the appraiser. The donor must also obtain a separate qualified written appraisal of the donated property from a qualified appraiser. The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser’s demonstrated knowledge of the donated property. The appraiser must include in his or her appraisal the qualifications of the appraiser who signs the appraisal, including the appraiser’s background, experience, education, and any membership in professional appraisal associations. The term “qualified appraisal” means an appraisal prepared by a qualified appraiser not earlier than sixty (60) days before the date of the contribution of the appraised property
Generally, the donor does not need to attach the qualified appraisal itself, but the donor should keep a copy as long as it may be relevant under the tax law. If your client donates art objects valued at $20,000.00 or more, however, the client must attach a complete copy of the signed qualified appraisal.
TIP #9: Recommend Requesting a Statement of Value if Donation is $50,000.00 or More. If you are considering donating an object of art that has been appraised at $50,000.00 or more, you can request a Statement of Value for that object from the IRS. The IRS user fee, which must be submitted with the request, is $2,500.00. The donor must request the statement before filing the tax return that reports the donation. If the donor’s request lacks essential required information, the donor will be notified and given 30 days to provide the missing information. This helps in avoiding penalties. For a request submitted, the IRS will issue a Statement of Value that can be relied on by the donor of the object of art.
TIP #10: Obtain the Advice and Assistance of Attorneys and CPAs Experienced in Charitable Donations of Personal Property Objects Such as Art, Antiques, and Other Collectibles The total value of your charitable contribution deduction and certain other itemized deductions may be limited, depending upon your adjusted gross income and the amount and type of donation. And there may be other options for tax savings and estate planning that are better fits for your circumstances. Get qualified help first!
I remember the first time I worked with one of the people on the Forbes total 10 list (10 wealthiest people). I was astounded to see how differently the super rich approach business, investments and tax savings. And that’s why they are able to make so much money and even more importantly, keep so much money.
There is a reason why Warren Buffet, one of the smartest investors of all times, only pay 16% in taxes. It’s strategies just like the ones you’ll find in the Advanced Pre-emptive Tax Strategies.
If it’s your goal to maintain a place with the nation’s rich and powerful, then you’ll want all the education you can get regarding how to get and keep tax power. That’s what the Tax Power Package will do for you. Available for the first 20 people ONLY. Please don’t wait. Once the special price of only $498 is gone, it’s gone.
P.S. If your business and investment ideas are outside the box, your tax strategies should be as well. BUT you have to do them safely and legally. That’s why it’s important for you to get the right knowledge from advisors who have a lot of experience in just this area.