MLB pitcher Cole Hamels and his wife donated their massive mansion to charity this week.
The gesture is very generous and the full story can be read here. What is not reported is the smart tax advantages the couple will probably get the next five years.
Their mansion was reportedly on the market for $9.4 Million. With it sitting idle and maintenance costs adding up, the pitcher who has earned $154 Million playing baseball was wise to seek a tax write-off.
Here’s how the tax advantage works:
In many cases, if one takes into consideration ongoing property taxes, maintenance costs, income taxes–or if the property is sold, the cost of legal fees, brokerage fees, estate taxes, inheritance taxes and capital gains taxes–it is often financially preferable to donate properties to charities.
You can deduct the full fair market value of the donated property. Your charitable contribution deduction is limited to various percentages of your adjusted gross income. Excess contribution value may be carried forward for up to five years. If the property has been depreciated, the fair market value must be reduced by its accumulated depreciation through the date of contribution.
If you choose to deduct your cost basis of the donated property you are allowed a deduction of fifty percent (50.00%) of your adjusted gross
Tax information via Helping Hands of America