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Discussion:Contribution Carryover

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{{Advanced Tax Questions}}
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[[Category: Charitable Contributions]]
{{ForumNewPost|UserID=Seaside CPA|Date=18 March 2011|Text=What happens to contributions when client is not required to file due to income?  Are they carried over in full? I know they are carried over up to five years if they are limited due to AGI, but can't find anything related to not having to file. Thanks!}}
{{ForumNewPost|UserID=Seaside CPA|Date=18 March 2011|Text=What happens to contributions when client is not required to file due to income?  Are they carried over in full? I know they are carried over up to five years if they are limited due to AGI, but can't find anything related to not having to file. Thanks!}}

Latest revision as of 15:30, 13 April 2014

Discussion Forum Index --> Advanced Tax Questions --> Contribution Carryover


Discussion Forum Index --> Tax Questions --> Contribution Carryover

Seaside CPA (talk|edits) said:

18 March 2011
What happens to contributions when client is not required to file due to income? Are they carried over in full? I know they are carried over up to five years if they are limited due to AGI, but can't find anything related to not having to file. Thanks!

Laketahoecpa (talk|edits) said:

18 March 2011
Would your client have had enough deductions to itemize if they did file a tax return? If standard deduction would have been higher then I think that's the easy answer - no carryforward (I don't think there's a carryforward regardless but can't provide you a cite).

MilTaxEA (talk|edits) said:

19 March 2011
File the return and then you can carry it forward, assuming you break the AGI limitation threshold.

Seaside CPA (talk|edits) said:

19 March 2011
Thanks for the replies. I think even if you use standard deduction, you may be eligible to carry some forward. I'm asking because I have a client that has not had to file in several years. He cashed in an IRA in 2010, not thinking about having to pay taxes on it. I'm trying to find all of the deductions I can for him, & if I can go back and use some of the prior years contributions, it will really help him out. Just not sure what I can use!

Kevinh5 (talk|edits) said:

19 March 2011
contributions up to 50% of AGI are used up?

Nightsnorkeler (talk|edits) said:

19 March 2011
Sec. 1.170A-10 Charitable contributions carryovers of individuals

Harry Boscoe (talk|edits) said:

19 March 2011
Let's put that regulation on the Summer Semester Reading List.

Does it address Seaside's question about "not having to file"?

MilTaxEA (talk|edits) said:

19 March 2011
What's the problem with amending prior year returns, itemizing, and carrying forward any phased-out charitable contributions? I would think it would flag for an audit quickly if you had something on Schedule A Line 18 ("carry over from last year") when they can see from your prior year return that you didn't even itemize and had no carry over.

Nightsnorkeler (talk|edits) said:

19 March 2011
How would you amend a return that hasn't been filed?

Harry Boscoe (talk|edits) said:

19 March 2011
Nitenorkler: Picky Picky!

MilT: But you *don't* need to itemize, at least according to something I read somewhere sometime in the past thirty years. Or was that for investment interest expense carryover?

Harry Boscoe (talk|edits) said:

19 March 2011
Reg. Sec. 1.170A-10(a)(2) follows... [Thanks for the link, Nightsnorkeler]

"(2) The carryover provisions apply with respect to contributions made during a taxable year in excess of the applicable percentage limitation even though the taxpayer elects under section 144 to take the standard deduction in that year instead of itemizing the deduction allowable in computing taxable income for that year."

[Oh My! Is that possibly a *typo* in the regulations: "...instead of itemizing the deduction (sic) allowable...." Might should that be "deductions", i.e., plural?]

Harry Boscoe (talk|edits) said:

19 March 2011
Not to mention that the election to itemize or not is in IRC Section 63, at least it has been for the past fifty-six twenty-five or so years... Was that a reference to Section 144 in the *previous* Code? How old are these regs?

Harry Boscoe (talk|edits) said:

19 March 2011
A prior section 144 ... related to method for electing to take standard deduction, prior to repeal by Pub. L. 95-30, title I, Sec. 101(d)(1), May 23, 1977 ... applicable to taxable years beginning after Dec. 31, 1976.

And these regs are from 1969-1970...! Those guys really knew how to write 'em back in the old days, didn't they!!!

MilTaxEA (talk|edits) said:

19 March 2011
I missed the part that they hadn't filed in prior years.

Very good cite, Harry. I'll have to remember that one in case if it ever comes up for a client; although this seems like a very rare case.

Harry Boscoe (talk|edits) said:

19 March 2011
Many years ago I had a very successful taxpayer who had one really bad year, and he didn't even bother to bring me his itemized deductions, knowing his AGI was *only* four digits for that year, but I insisted, and he ended up carrying forward almost $12,000 of unused charitable deductions without itemizing. This is the kind of thing one remembers even through the haze...

Yeah, but what did you have for dinner last night, Harry?

Harry Boscoe (talk|edits) said:

19 March 2011
Seaside are you still waiting for the answer to the *unfiled* question? Don't think we forgot about you; we're just having a hard time finding a solid answer. Consider how much time it took the six or seven of us still awake out here to read the 170 regulations and *not* find an answer...

Seaside CPA (talk|edits) said:

19 March 2011
Harry, you crack me up! I cannot find an answer either. I just took another look at his files, and he did not file in 2006, 2007, or 2009. His income (before SS) each year was from $3,000 to $4,000. He had an NOL going into 2006 (and still has) of about $8600. So seems he could carry over 100% of contributions since NOL would reduce AGI below 0 each year. In his case, his contributions are over $10,000 total. Thanks to everyone for trying to help on this - I have NEVER run into this before. May be a good reason to file a return even if not required to! I'm still not sure what to do on it - going to sleep on it for a couple of days!
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