Should I donate a vacant land that went down in value?

Here’s a tax question, I got from one of my clients:

Should I donate a vacant land that went down in value?

Here are the facts of the case:
Client bought a vacant land in Florida 10 years ago for $35,000. It’s now worth $5K.

She is feeling charitable and would like to give the vacant land to her favorite charity.

So what do we do?

If she donates her vacant lot, she can deduct the land’s $5k market value as charitable deduction. That is good. However, we can do better.

Here’s the LowerMyTaxNow strategy:

Sell your lot to recognize the $30,000 capital loss ($35K cost less $5K market value). You can deduct $3K of capital loss every year or you can offset these losses with any future capital gains.

Afterwards, you can donate the $5K cash to your favorite charity.
Whoolah! Not only you gave the same $5k value to your favorite charity, but you were able to recognize the loss from the sale of the vacant land.
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Until then, this is Noel Dalmacio, your ultimate CPA at

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Noel Dalmacio, CPA, CFP, MS TAX
30 Corporate Park, Suite 102.
Irvine, CA 92606

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