Instructions for nonresidents who are required to file forms MW506NRS, MW506AE, MW506R and MW508NRS to determine and collect income tax withholding due on the sale of property located in Maryland and owned by nonresidents.

Maryland State and Local Tax Forms and Instructions

When it comes to itemizing deductions on an individual tax return, a taxpayer has the option to report any type of donation to a qualified organization, whether it is cash or property. However, different rules apply.

For cash donations, the rule is very simple. A taxpayer can deduct up to 50% of adjusted gross income (AGI) as an itemized deduction. If the cash donation is over 50% of AGI for a given year, the taxpayer has the option to deduct it within the next five year.

For property donations, it gets a little more complicated. The general rule is that the taxpayer is allowed to deduct the fair market value of a donated property that is held in possession for more than a year. The limit in such cases is 30% of AGI.

There is wide range of type of property that can be donated, so let's go into the details.

If the taxpayer donates stock, the amount that can be deducted is the fair market value of the stock if it is held more than one year. So, what happens if that stock is held for less than a year? The amount of deduction is the price at which the stock was bought.

For a car donation with a fair market value greater than $ 500, a taxpayer can take a deduction for the lesser of the sales proceeds by the qualified organization, or the fair market value at the date of contribution.

This brings us to a situation that I encountered in my practice. One day, a customer called and asked: what is the best way to get rid of an old car from a tax standpoint? After asking more details about his situation, while giving myself time to come up with an answer, I experienced a light bulb moment. Put your car for sale. Then, give away the sale proceeds to charity. The rationale behind it was that he would be able to deduct a bigger amount on his taxes because if a charity sell the car for more than the fair market value at contribution date, he could only get a deduction for the lowest amount.

Overall, cash donation are the best option because there is less tax restrictions. However, it always good to know that we have many options.

https://www.irs.gov/publications/p526/ar02.html#en_US_2015_publink1000229755

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