If you itemize deductions, you may deduct contributions of money or property made to the following types of organizations qualified under section 170(c) of the Internal Revenue Code:

• A state or United States possession, or the United States or the District of Columbia, if made exclusively for public purposes;
• A community chest, corporation, trust, fund, or foundation organized and operated exclusively for charitable, religious, educational, scientific, or literary purposes, or for the prevention of cruelty to children or animals;
• A church, synagogue, or other religious organization;
• A war veterans’ organization or its post, auxiliary, trust, or foundation organized in the United States or its possessions;
• A nonprofit volunteer fire company;
• A civil defense organization created under federal, state, or local law;
• A domestic fraternal society, operating under the lodge system, but only if the contribution is to be used exclusively for charitable purposes;
• A nonprofit cemetery company if the funds are irrevocably dedicated to the perpetual care of the cemetery as a whole and not a particular lot or mausoleum crypt.

Your deductions are generally limited to 50% of your adjusted gross income.  Certain types of property donations and donations to certain organizations may be limited to 20% or 30% of adjusted gross income.

If you receive a benefit from your donation, for example a dinner, you can only deduct the amount that exceeds the value of the benefit received.

Records must be kept to prove the amount of contributions that you claim on your tax return.  In order to substantiate a cash contribution, you must keep one of the following:

• A bank record that shows the name of the qualified organization, the date of the contribution, and the amount of the contribution.
• A receipt from the qualified organization showing the name of the organization, the date of the contribution, and the amount of the contribution.
• Payroll deduction records.

You can claim a deduction for a contribution of $250 or more only if you have an acknowledgment of your contribution from the qualified organization.  If you made more than one contribution of $250 or more, you must have either a separate acknowledgment for each or one acknowledgment that lists each contribution and the date of each contribution and shows your total contributions.

For non-cash contributions, the record keeping requirements vary depending on the fair market value of the contribution.  See IRS Publication 561 for more information.

As always, this is only meant as a brief overview.  If you feel that we can be of further assistance to you, please contact our office to set up an appointment.

Email us at: [email protected]

Call us at: 302-239-3500

Visit our website: http://www.dohertyandassociates.com

– Doherty & Associates Team

If you are contemplating expanding your business into more than your home state, there are several factors to consider.

Do I need to register in the other states?

The answer to this (like so many other tax questions) is it depends.  If you have a physical presence in another state, e.g. a retail location, then you must register.  If your business is conducted online from you home base, chances are that you don’t need to register with other states.

Do I have to collect sales taxes?

Again the answer is it depends.  If you have a physical presence in a state that has a sales tax, you generally are liable for collecting the tax from your customers. Different states have different definitions of physical presence and also have different definitions of what is considered a taxable sale.  In some states, however, you do not even need a physical presence in order to be liable for sales tax.

Do I have to pay income taxes to other states?

The large majority of states have an income tax.  If you have a presence in that state (again the definition varies by state) then you will be subject to income tax on the amount of income that is apportioned to that state.  The formulas for determining apportioned income vary by state.

Do I need to do anything differently if I am an S Corporation?

Most states do not require a separate election to be treated as an S Corporation.  If you have a valid Federal election, the state will treat you as an S Corporation.  Some states, however, require a separate S election (New Jersey for one).

If you are planning to expand your business into other states, it is extremely important that you are properly set up to conduct business in those states before you start conducting business there.  If you are not set up properly it can be costly.  For example, New Jersey charges a fee per year for a late filed S election.  There could be penalties and other inconveniences such as delayed refund.

As always, this is only meant as a brief overview.  If you feel that we can be of further assistance to you, please contact our office to set up an appointment.

By law real estate rental is a passive activity. Passive losses are only deducible to the extent that they offset passive income.  Additionally, passive rental income can be subject to the new 3.8% tax on net investment income.  There is a special provision that allows individuals to deduct up to $25,000 of rental losses.  However, this provision is phased out between $100,000 and $150,000 of adjusted gross income.  A real estate professional’s rental income is non-passive, meaning losses can offset any type of income, not just passive income.

To qualify as a real estate professional:

• More than half of the personal services that you perform during the year must be in real estate trades or businesses.
• You must spend more than 750 hours in your real estate trades or businesses.

This is just a brief overview and does not cover all of the intricacies involved in qualifying as a real estate professional. Please contact our office to set up an appointment to explore what is right for your situation.

Email: [email protected]

Phone Number: 302-239-3500

PRWeb recently recognized Doherty & Associates for our first fundraiser for The Ronald McDonald House of Delaware.

Debria Doherty, Doherty & Associates President & CEO, summarized it best when she said, “It is very heartwarming to offer support to families that are experiencing one of the most traumatic events in their lives. I am very proud of the Doherty & Associates’ staff and all others who gave of themselves to make this event successful. It was truly a team effort!”

We are honored to be recognized by PRWeb and are excited for future charity events to come!

Click here to read the full article.

If you are interested in investing in real estate, you should attend the “Smart and Clean” Real Estate Investing Event—sponsored by DELREIA on Saturday, Jan 25^th, 2014. Go here to watch a short video that explains what the event is all about and how to get registered!

Additional details about the event are below. We hope to see you there! – Doherty & Associates Team

When: 

Saturday January 25^th, 2014 @ 9:00am – 4:00pm

Where:

Sheraton Wilmington South
365 Airport Road, New Castle, DE 19720

Part 1: “Why Invest in Notes or create them as a Private Lender? Why use IRA money?” 

• Learn mortgage note investing strategies and why so many investors have turned to buying notes instead of properties. Dave Van Horn from PPR will be presenting on “How to Utilize IRAs to Raise Capital and Invest in Notes.” ALSO, learn how to evaluate and financially back, secured real estate projects. BIG returns without the headaches of dealing with property or tenants! Do these through your self-directed IRA and you have a beautiful marriage of strategies!

 Part 2: “Advanced IRA Strategies for Real Estate and Note Investors” 

• Because it’s not what you make, it’s what you keep, that counts… Learn how to make tax free income for life for you and your heirs. Implement strategies to increase returns on your real estate and note investments by 20 to 50%! Compound growth without taxes through a self-directed IRA is simple but powerful. Carl Fischer, former NASA rocket scientist and founder of CamaPlan – Self Directed IRA (SDIRA )will be presenting advanced SDIRA strategies and case studies.