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Tax, SDIRAs & Cost Segregation

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Mark Lucido
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  • The Colony, TX
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Charitable donations: Personally or from LLC?

Mark Lucido
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  • Investor
  • The Colony, TX
Posted Mar 27 2017, 10:59

I'm curious how other investors are making their charitable donations, particularly if they own an LLC. I'm considering making my donations from my LLCs and in my particular instance, my LLC Partnership income flows through straight to my personal taxes. If I make the donations from the LLC then there might be a small benefit of reducing my overall LLC income by the donation amount. If I make the donation personally, I'm already in such a high tax bracket that I'm not sure how much I can benefit from it. What are others doing?

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Lance Lvovsky
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  • Fort Lauderdale, FL
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Lance Lvovsky
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  • Fort Lauderdale, FL
Replied Mar 27 2017, 11:19

Charitable deduction from a pass through entity such as a LLC will still flow to Sch A as a charitable deduction.

Remember, in a pass through entity, all items of income and deductions retain their character. As such , a charitable deduction at the entity level will still be a charitable deduction on your individual income tax return.

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Mark Lucido
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  • Investor
  • The Colony, TX
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Mark Lucido
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  • The Colony, TX
Replied Mar 27 2017, 11:42

Sorry @Lance Lvovsky I should have been more clear.  It's passed through personally as a K1 so technically my LLCs are Partnerships and not disregarded entity.  Just wanted to make that clarification - understand it's still a passthrough though.

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Lance Lvovsky
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Lance Lvovsky
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  • Fort Lauderdale, FL
Replied Mar 27 2017, 12:16

That's right, your LLC is not a disregarded entity for tax purposes because your LLC has a filing requirement. As such, charitable contributions are reported as a separately stated item on Schedule K, line 13a. That flows to Box 13a of Schedule K-1.