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Are contributions to a special needs trust tax deductible? I am unaware, but a colleague found two links saying yes.

troy1
Level 2
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George4Tacks
Level 15

NO

I do not see anywhere in those links that says tax deductible. 

Such a trust is not a charitable organization. It's primary purpose is to protect assets and provide for the "Special Needs" of a disabled individual, without endangering government assistance for that individual. Whenever you stop and give something to that person with the cardboard sign, you are likely contributing to a special needs individual. If they add the words "contribute to my trust" would you think it to be a valid deduction?


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15 Comments 15
TaxGuyBill
Level 15
Those links say the cost to CREATE the trust may be tax deductible (although that may not necessarily be the case in 2018), not that the money put into the trust is deductible.
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troy1
Level 2
GREAT catch! Once you pointed that out, I totally agree with that assessment. Sometimes you can read something 20 times until you realize what it is truly saying.
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George4Tacks
Level 15

NO

I do not see anywhere in those links that says tax deductible. 

Such a trust is not a charitable organization. It's primary purpose is to protect assets and provide for the "Special Needs" of a disabled individual, without endangering government assistance for that individual. Whenever you stop and give something to that person with the cardboard sign, you are likely contributing to a special needs individual. If they add the words "contribute to my trust" would you think it to be a valid deduction?


Answers are easy. Questions are hard!
sheila7000
Level 1

Yes, most definitely I believe that if the words "contribute to my trust" was added to the cardboard sign, that's a valid deduction.

Just the fact the person is using a cardboard sign in-and-of-itself is signal enough that we do NOT have enough incentives for the rest of us to be helping people w/ disabilities have a higher standard of living that is indeed also a happier standard of living (happier when the happen to have friends to share with !!! Difficult to have friends when you've nothing to share !!!)

Even under such "fantastic" circumstances, I'd much rather be the person WITHOUT a qualifying disability.

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abctax55
Level 15

"....contribute to my trust" was added to the cardboard sign, that's a valid deduction.

@sheila7000 - Words on a cardboard sign do NOT make something deductible under IRC.   I'd really hate for a future searcher to see your comment.

And FYI, this post is almost two years old.  There's no reason to resurrect it.

HumanKind... Be Both
sheila7000
Level 1
Jesus said, “You will always have the poor among you, " ( John 12:8). Since there was reason resurrect that concept about 2000 years later, what's your basis on believing there's no reason to resurrect it again just 2 years later after that?
 
I'd really love for a future researcher to see my comment, "....contribute to my trust" was added to the cardboard sign, that's a valid deduction," esp. if by then we actually have contributions to a special needs trust be tax deductible.
 
Of course the words don't make it tax deductible. But, if the person had a special needs trust because they qualify for it, and the laws would get with the program and allow it to be tax deductible, then it'd most definitely be a valid deduction. And, because of the words on the cardboard, it would be a signal to the givers that there's some sort of process involved in getting this into this qualified person's trust for a valid tax deduction.
 
In other words, it's not because money given to people w/ cardboard signs in general isn't tax deductible that contributions to a special needs trust isn't tax deductible. It's BECAUSE the laws aren't with the program to allow it to be tax deductible - regardless if the qualified person is holding a cardboard sign or not.
 
Also, by the time, "....contribute to my [special needs] trust" gets added to the cardboard sign, it'll be because laws will be with the program that it's deductible, and therefore it will be valid deduction. So yes, most definitely I believe that if the words "contribute to my trust" was added to the cardboard sign, that's a valid deduction, as I had said, but you didn't get it. Of course it can also be tried as a scam at any time.
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abctax55
Level 15

Tax laws are tax laws.

Wishes don't change them - even when there are social injustices.

Take it up with Congress.

HumanKind... Be Both
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qbteachmt
Level 15

"So yes, most definitely I believe that if the words "contribute to my trust" was added to the cardboard sign, that's a valid deduction, as I had said, but you didn't get it."

When you give money like that, that is a gift. Not a tax deduction. An individual is not a qualified charity.

Stop confusing IRS regulations and morality. This is not that sort of forum.

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sheila7000
Level 1

Because you're not Congress - yeah that sounds lame. 

Right often makes might, meaning laws can change for the better.

Tax laws are arbitrary, and so are the consequences. But, it's no excuse not to strive for better.

It's been my experience that the 4th branch of the US government is the most effective, "We The People..." And, likely that's why it's taught that our government only has 3 branches. Wouldn't want the 4th branch to have too much power...

So I'm approaching "the people" instead of Congress - no big deal. 

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qbteachmt
Level 15

@sheila7000 

"So I'm approaching "the people" instead of Congress - no big deal."

Nope, you're not. This is a Lacerte Program users' forum. The people here are trying to use Lacerte Software for their clients. If that is not what you are doing, you are lost on the internet. This is not a Social network. It's not a morality discussion group. There are tons of that elsewhere.

Did you have a question for how to use Lacerte to prepare your clients' income tax return? That's where you are.

Otherwise, you just stormed into a group that is on their jobs; that sort of disruption is called Trolling.

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sheila7000
Level 1

Ok. But, it's not trolling.

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abctax55
Level 15

Yes, it is and yes, you are (trolling).

Just because Intuit won't lock out non-professionals doesn't mean you should be here

Please go to some social media forum to suggest the changes you'd like to see in the tax codes.

@IntuitJim and/or any other mods - this thread needs to be locked.

HumanKind... Be Both
sheila7000
Level 1

Trolling is intentional. So you are wrong. Imagine that!

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qbteachmt
Level 15

"Trolling is intentional. So you are wrong. Imagine that!"

Nice. You must be very proud of yourself.

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Don't yell at us; we're volunteers
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sheila7000
Level 1

Yes, I can imagine. And, that became a problem for you.

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