Gift of Cash
For all concerned, an outright gift of cash is certainly the simplest method of giving. It is not subject to gift or estate taxes, and you can deduct the gift amount on your federal income tax return, up to 50 percent of your adjusted gross income. Should the gift total exceed the gift ceiling for one year, you can carry over the remaining deduction to succeeding tax years until it’s exhausted, or for up to five-years, whichever comes first. So with careful planning, nearly every outright gift to us can be fully deducted.
Example:
Mr. Strauss has adjusted gross income of $70,000 this year. He contributes $50,000 to TAPPI. He can deduct $35,000 this year ($70,000 adjusted gross income x 50 percent).
Because of the five-year carry-over, the remaining $15,000 can be deducted the next year (assuming his adjusted gross income is $30,000 or more). So, his $50,000 gift is fully deductible.