Question
memo in tax To: Summer Intern From: Joe Local Date: April 2, 2019 Re: Tax Planning for Keith & Jennifer Hamilton Keith and Jennifer purchased
memo in tax
To: Summer Intern
From: Joe Local Date: April 2, 2019
Re: Tax Planning for Keith & Jennifer Hamilton
Keith and Jennifer purchased 100 Bitcoins for a total of $50,000 in 2013. Bitcoins are now worth $4,750 each, after reaching a peak of over $10,000. Jennifer thinks they should consider selling now, before the cryptocurrency market completely bottoms out. Keith is concerned with paying capital gains tax on so much money and wonders about making a significant charitable contribution but agrees that they should sell the Bitcoin. Keith and Jennifer are both comfortable gifting $250,000 to charity but cannot agree on where to make the contribution. Keith doesnt think it will save them that much in taxes and worries about making significant donations in one year. Hes heard good things about setting up a private family foundation and wonders if that is a good way to spread out the contributions over several years. Jennifer wishes to donate it to their high school alma maters, public schools in Ohio. Please prepare a memo making a recommendation on how the Hamiltons should structure their contribution in order to receive the best tax advantage, including a projected tax liability assuming the Bitcoins are sold in 2019. You can find their 2018 tax return in their permanent file, and assume future income, deductions, withholdings except for the sale of the Bitcoin will remain the same.
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