You are here

“Personal tax shelter” fails in Tax Court

“Personal tax shelter” fails in Tax Court

“Personal tax shelter” fails in Tax Court

A retired grandmother who is “fond of shopping” developed what she described at trial as her “personal tax shelter.” She bought clothing that had been heavily marked down for sale at Talbots and immediately gave it to Goodwill Industries so that she could claim a charitable contribution deduction on the original list price. Because she was a valued customer, she earned “points” or “appreciation dividends” on her purchases so that her out of pocket costs were even lower than the sale price. In 2012, she purchased and gave away clothing originally listed for $34,401 that she had purchased for $6,047, including $2,520 in cash and $3,527 in points. She claimed a deduction of $34,401. The IRS...

lock The full text of this article is available to paid subscribers only. Login or subscribe to read more

 

Sign-up for our weekly Q&A; get a free report on electioneering