Forbes “Bucket List” of Tax Deductions Seems Less Than Charitable

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June 25, 2012; Source: Forbes

Say it ain’t so, Kelly! Kelly Phillips Erb, a writer for Forbes, has a list of 15 potential tax write-offs that you might want to try, but these tax tips are drawn from your typical “bucket list” of desired pre-death activities. Somehow, combining a bucket list with tax avoidance never came to me as I contemplated a house in Tuscany after retirement.

But Kelly has ideas, and some of them come with grafting your bucket onto charity:

  • Kelly’s suggestion #7: “Roll the dice at Atlantic City or Vegas. You can deduct your traveling costs only if you’re in a gambling mecca on a legitimate business trip or for volunteer work—not just for fun. But if you itemize, you can deduct your gambling losses, up to the amount of your winnings.”

  • Kelly’s suggestion #10: “Adopt a child. If you’ve always wanted a child—or you’re ready to raise another—consider adoption. You may be entitled to a tax credit to offset—dollar for dollar—up to $12,650 in qualified adoption expenses…”

  • Kelly’s suggestion #12: “Start a scholarship fund for your alma mater…To be deductible, charitable contributions must be made to qualified organizations: Most colleges and universities fall into that category.”

  • Kelly’s suggestion #14: “Go golfing/horseback riding/surfing. The tax law generally imposes restrictions on deductions for business and charitable expenses when there is a personal pleasure element. There are, however, some exceptions to this rule, if the main purpose of a sports event is to benefit a qualified charity, the entire net proceeds go to the charity and volunteers perform substantially all the event’s work.”

One of Kelly Phillips Erb’s roles at Forbes is to make reading about taxes fun. Her bucket list suggestions have that fun feel, to be sure. Nonetheless, something about the suggestion of using charity as a cover for some of the bucket items feels a little uncharitable. I will never be able to afford that villa in Tuscany, all things considered, but I don’t think I’ll be angling for a charitable deduction if the opportunity for a little abode in Lucca, Pisa, or Siena ever happens.—Rick Cohen

  • Kelly Phillips Erb

    Thanks for the mention, I appreciate it! But I couldn’t disagree with you more about linking charity together with your bucket list. I work together with a lot of charitable orgs as well as private wealth clients and there’s almost always some non-charitable incentive involved even with the most noble of intentions. It’s why hospitals put donor names on buildings and why public radio gives out tote bags: people like to feel recognized and have a value associated with their gifts. In that way, it’s not a cover, it’s a value added.

    As to the underlying issue of taking a deduction for knocking a few items off of your list, why not? I wouldn’t suggest that you plan your life around taxes (especially as they’re a moving target these days) but why wouldn’t you take a legitimate tax deduction if it’s available? It’s the same reason you claim your home mortgage interest now – the Code allows you to do it. There’s nothing that says that you have to pay more tax than you have to.

    Again, thanks for mention. I do hope that I make taxes a bit more fun – well, as fun as taxes can be. 😉

  • rick cohen

    But Kelly, the bucket list is desire! It’s as you noted in many instances what you want to do when you retire. Hopefully your bucket motivation is that after you finish your workaday life (at Forbes or at the Nonprofit Quarterly), you want to work for charity and philanthropy, not that you want to do other things that you might be able to slough off as charitable deductions or write-offs. It’s the bucket list question, not the issue of making charitable deductions. When you’re at the bucket list time of your life, the motivation should be you want to work with or for charity because charity is the bucket list item. Maybe for most of us, when we’re at the bucket list time of our lives, we aren’t quite at the income levels where charitable deductions are going to do much for us. Hopefully our 401(k)s have recovered from their 101(k) status, but there might not be a lot of other income coming in to write off our travels to Costa Rica and our gambling expenses at a charitable event in Las Vegas or Atlantic City.

    There’s much we can discuss just in your note here, including the issue of recognition for charitable giving, how much these incentives work or don’t work to spur charitable giving, and more. Thanks for writing the bucket list and stimulating a good discussion, and keep making taxes fun. I wish I had that joie de vivre about the tax articles I write here at the Quarterly.