• Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

Farmers and Merchants Trust Company

Trusted since 1920

Main navigation

  • About Us
    • Our History
    • Who We Are
    • Our Team
    • Contact Us
  • Locations
    • Long Beach Office
    • Laguna Hills Office
    • Torrance Office
    • Santa Barbara Office
    • Newport Beach Office
  • Services
  • FAQ
  • Community
  • Login
    • Login
    • Sign Up

August 25, 2017

How is the income tax deduction determined?

The deduction is based on the amount of income received, the type and value of the asset, the ages of the people receiving the income, and the Section 7250 rate, which fluctuates. (Our example is based on a 3.0% Section 7250 rate.) Generally, the higher the payout rate, the lower the deduction.

It is usually limited to 30% of adjusted gross income, but can vary from 20% to 50%, depending on how the IRS defines the charity and the type of asset. If you can’t use the full deduction the first year, you can carry it forward for up to five additional years. Depending on your tax bracket, type of asset and type of charity, the charitable deduction can reduce your income taxes by 10%, 20%, 30% or even more.

Primary Sidebar

Services

  • PERSONAL TRUST MANAGEMENT
  • INVESTMENT MANAGEMENT
  • CHARITABLE TRUST MANAGEMENT
  • FOUNDATION & ENDOWMENTS
  • AGENTS FOR TRUSTEE
  • IRA & EMPLOYEE BENEFITS
  • REAL ESTATE MANAGEMENT
PRIVACY POLICY | TERMS OF USE
Copyright © 2022 - F&M Trust
A message from F&M Trust President regarding the Coronavirus.
Read More