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Member
Group: Forum Members
Last Login: 5/25/2007 8:34:32 AM
Posts: 1,
Visits: 6
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| I am working on the estate tax return for a client in which the revocable living trust provides for the following with respect to the decedent's personal property. After various specific gifts, the balance of the personal property is to be split equally between 4 individuals. Any items not accepted by any of the 4 individuals shall, in the trustee's discretion, be donated to a charitable organization or discarded. The issue has arisen as to whether the amount donated to charities qualifies for the estate tax charitable deduction. Based on what I have looked at so far, I'm inclined to think not, since as of date of death, one could not ascertain what would be donated to charity and the trustee had discretion to throw stuff away. What do you think?
Terri Hogoboom, CPA
Walnut Creek, CA
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Member
Group: Forum Members
Last Login: 1/3/2012 10:46:42 AM
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Terri,
Seems to me if any items of personal property have a known value, whether appraised by professional appraiser or by the executor, and therefore have to be included in the estate, and if the 4 individuals decline to take the items, you could have a disclaimer situation. In that case, it sounds like charitable to me.
bill
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Power Member
Group: Forum Members
Last Login: 3/12/2011 12:58:57 PM
Posts: 147,
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| I hate to disagree with Bill but I think Terri had it right. The trustee's discretion is what loses the charitable deduction as far as I'm concerned. On a practical matter when we have an estate and *stuff* is donated to charity, we notify the beneficiaries to each take their percentage share of the deduction - presuming of course that the charitable deduction is not greater than the FMV as of the date of death - because the trust/estate cannot take a charitable deduction under the circumstances. Isn't funny how something that has a low value for 706 purposes becomes more valuable when donated to the Salvation Army? 
Mary Kay Foss
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