- Days left

Metallica frontman James Hetfield feels charitable

James HetfieldMetallica singer and guitarist James Hetfield may well be feeling charitable around the holidays. The Marin County Board of Supervisors just voted unanimously to accept Hetfield's donation of 330 acres overlooking California's Lucas Valley. The land is to be preserved as farmland.

Hetfield has previously donated more than 400 acres to the county for use as open space.
Both parcels are around Hetfield's home.

The donation is a nice-enough story. But the real story? Hetfield's land-use consultant, Scott Hochstrasser, is a genius. Here's why: the donations make Hetfield look good, they may garner him a generous tax deduction and they afford him something that he may not have a lot of -- privacy.

If his gift qualifies as a charitable deduction, and it's been owned for more than a year, Hetfield may be entitled to a charitable deduction equal to the entire fair-market value of the property. For individual taxpayers, the deduction would be limited to a 30% limit of adjusted gross income -- but eligible to be carried over for 5 years for the portion of the deduction that goes unused.

To qualify for a federal income tax deduction, the land or easement must be donated to a public charity or government entity (here, Marin County). The donation must serve at least one of the following conservation purposes:
  • the preservation of land areas for outdoor recreation by, or the education of, the general public;
  • the protection of a relatively natural habitat of fish, wildlife or plants, or similar ecosystem;
  • the preservation of open space (including farmland and forest land) where such preservation is for the scenic enjoyment of the general public or pursuant to a clearly delineated Federal, State or local governmental conservation policy, and will yield a significant public benefit, or
  • the preservation of an historically important land area or a certified historic structure.
Since the contribution is to be used to promote "agricultural conservation efforts", the donation would appear to serve a number of those purposes. In other words, it would seem to qualify for purposes of a federal income tax donation.

Further, by restricting the rights of others to develop the land (a key part of most charitable donations of real property), Hetfield has ensured that a full slate of McMansions won't sprout up next to his home. It will stay green, attractive and - best of all - private.

It's a win-win. One wonders why more celebs don't follow Hetfield's lead.

Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum