How to Get A Charitable Tax Deduction for Remodeling Your Properties

By Steven Singer, CPA, MS (tax)

If your home or rental property needs remodeling, consider getting a charitable tax contribution by helping a worthwhile cause. Many charities build and renovate homes for the needy. The tax law allows you to take a charitable deduction for donating used building materials removed from your house or rental property when they are used by a qualified organization.

How much you can deduct depends on the fair market value (FMV) of the materials you donate and when you donate them.


• For property held for more than 1 year, you will usually get a deduction of the FMV of the materials donated. If the property was used for business or rental purposes, you must reduce the FMV by any gain (if you sold the property) that is considered ordinary income. This is a simple calculation if you ask your tax advisor.

• For property held less than 1 year, you will usually get a deduction of either the FMV or the cost basis (less any depreciation allowed) of the materials donated, whichever is less.

• There may be limits depending on how much you contribute and your adjusted gross income, but the good news is, you can carry forward any unused deduction to later years.


Before you begin your remolding process:

1. Get your licensed contractor to give you two bid quotes. One for deconstructing the space that you are remodeling and another one for demolishing it. Deconstructing the space is more expensive than demolition because fixtures, sheetrock, wood studs and more are taken apart slowly and carefully by hand to recycle every last piece as opposed to demolition where they rip out the materials without any consideration for reusing them (e.g. they just go into the dump).

Deconstruction usually is 1.5 to 2 times more expensive than a demolition process. However, since demotion is only a small part of your remodel, it should not add a large cost to your overall remodel.

2. Find an appraiser that can appraise the reusable materials that result from the “deconstruction” process. Usually they can give you an idea of the FMV per sq. ft. of real property you are remodeling. Appraisal costs range but typically are around $2,000-10,000. They will need to see the materials before they are donated to a charity so they can issue an appraisal report.

3. Consult with your tax advisor. They usually know a qualified appraiser you can use in your area or one can be recommended by the charity to which, you are going to donate the materials.

Your tax advisor should also be able to determine whether it is cost beneficial to consider getting a charitable deduction. For example, if the appraisal cost is $5,000 and the additional contractor cost of deconstruction is $5,000, the donation you must receive must exceed $35,000 to give you a net tax benefit. Some of our clients have obtained charitable benefits of over $100,000.

4. Pick a 501(c)(3) US charity in your area that has as their mission to use the materials in their programs such as Habitat for Humanity.

After your remodeling process:

5. The appraiser will give you a signed appraisal report and an IRS form 8283 signed by both the appraiser and the charity to which, you contributed the material; both must be attached to your tax return.

If these steps are followed correctly, then there is an excellent chance that much of the costs of your next remodel can be claimed as a charitable contribution.

For more information about this and other tax strategies to help you pay only your fair share of taxes, please contact or call Steve at 510-797-8661 X 226 or email him at

How to Manage and Beat Stress

There are really two kinds of people in the world: people who act and people who wait to be acted upon. Of course, that’s a generalization, but the reality is, most people fall into these two categories.  Some people take control of what happens in their life, while others sit back and let life happen to them.

It’s also interesting to note the difference in how these two groups handle stress.  Those who take control of their lives tend to deal with stress much better than those who allow life to control them. Both groups feel stress and they both feel the negative effects of stress, but they deal with it differently.

Here is how the first group takes control of the situation and manages stress. For starters, they expect change, and they prepare for it. Change is going to happen. It’s a part of life. People who are prepared for it can manage unexpected change more effectively.

People who handle stress well tend to focus on the positive instead of the negative.  For example, they recognize the freedoms they have instead of the limitations they face. Speaking of avoiding negativity, those who manage stress well, avoid negative self-talk. They know that staying negative will not help so they focus on the positive instead.

Successful stress managers also remember to be thankful for what they already have. There are no guarantees, so it’s important to recognize all the good things there are in life. This will improve your mood, lower your stress level, increase your energy and make you even more grateful.

Stress is inevitable, but when you choose to control and manage it, you remain in charge of your life and its outcomes.

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Will Equifax Breach Open Door to Tax Scammers?

The tax season is always ripe with challenges, not the least of which is dealing with another wave of tax scams. Scammers are constantly looking for newer and more deceptive ways to steal your hard-earned money, including your tax refund.

Although, the tax-filing season is still a few months away, there is already a new threat emerging, thanks to the massive data breach that affected nearly half of all taxpayers in the country. Hackers were able to find a breach in Equifax’s security and steal the private information of about 143 million U.S. adults.

What does that mean for taxes? Now that this information is available on the dark web, the chances of your tax refund being hijacked have greatly increased. So what’s the number one thing you can do about it?

Of course, you need to keep a vigilant eye on your credit score and accounts, but you also need to be prepared to file your tax return as early as possible. That’s because if you file your return before a scammer does, they can’t file it for you and steal your refund.

While the IRS and the FTC always recommend filing your taxes early, this coming tax season it will be even more important. According to the FTC, taxpayers should file “as soon as you have the tax information you need, before a scammer can.”

That means you should start preparing now so you’re ready when tax season begins.
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Five Tips to Identify Exceptional Employees

Every company wants to hire the best people. After all, your employees are what make your company successful. There are many ways to search for exceptional employees, but if you follow a few keys tips you’re more likely to have the most success in your search.

So what things should you be doing to identify and hire the best employees? Here are some of the most important factors.

  • Anyone who is willing to be patient and trade short-term gains and recognition for long-term success and gratification is usually an exceptional employee.
  • Employees that deal with conflict well are generally exceptional people that you want on your team. They don’t look for trouble but they know how to handle it when it comes their way.
  • Exceptional employees are never happy with the status quo or comfortable with their current standing. They always look for ways to go further and achieve even more.
  • Exceptional employees know how to check their egos. It’s not that they don’t have egos; they just understand how to control their egos. They don’t let their egos control them.  They can also admit when they are wrong and learn from their mistakes.
  • Exceptional employees know how to stay focused. They don’t let distractions and conflict hinder their view of the ultimate goal. They understand the difference between small issues and real problems.
Everyone wants to hire the best employees. By keeping these tips in mind, you will have a better chance of being successful in your search.
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Selling globally: How to get started

For many businesses, selling their products or services globally is a natural next step in their growth.  But while the prospect of billions of new potential customers is attractive, going global can be a daunting proposition.  Here are a few tips on how to get started.

Tap your network.  Take advantage of your network for ideas about going global and assistance in finding strategic partners and international customers. This includes your advisors, colleagues, customers, suppliers, employees, trade association contacts and social media connections.

Leverage technology to boost your global presence.  To attract international customers, make the most of today’s technology to “broadcast” your business. Examples include websites, YouTube, blogs, social media networks, and other online platforms.  Regardless of the tools you use, the key is to make your business known internationally and to provide content that attracts international visitors to your website.

Determine how you will sell internationally.  You can sell directly to overseas customers, but keep in mind that you will be responsible for shipping and other logistics, as well as collecting, which can be risky. A safer option may be to set up an e-commerce site or use an e-commerce platform, such as Shopify, to streamline and automate the sales and collection process in exchange for a percentage of your sales. Other strategies to consider include joint ventures or strategic partnerships with firms overseas, outsourcing global sales, using an intermediary to ship products to international consumers, and licensing and franchising arrangements.

Determine how you will collect. Fear of not getting paid is the biggest obstacle to going global for many businesses, so it’s important to have a collection strategy before you dip your toes in international waters.  Strategies to consider include getting paid in advance; online payment platforms, such as PayPal; and banking products, such as letters of credit and sight drafts. In addition, the Export – Import Bank, the Small Business Administration and other organizations have programs that assist businesses in financing international transactions.

Get help.  To mitigate the risks associated with going global, it’s important to work with a team of advisors — including lawyers, bankers, and accountants — with international experience. It’s particularly critical to find a qualified lawyer who can help you preserve your intellectual property, comply with the laws in the countries in which you do business, and draft contracts that clearly spell out the parties’ respective rights and responsibilities and protect your interests.

Here are a few sources for more information about selling globally:
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Five Mistakes That Can Destroy your Career

There all kinds of ways people can end up hurting their careers. Sometimes they make honest mistakes, and in other cases, people make poor choices that can totally ruin their careers.

In most cases, people don’t get the boot or destroy their career by one big mistake or poor decision. It’s more likely to occur little by little with several bad choices or traits. So what kinds of mistakes do you need to be aware of and avoid at all cost if you don’t to send your career into a tailspin? There are all kinds of mistakes but here are five big ones that can have a huge impact.

Having a super ego – never let your ego damage your career. It’s great to be successful, but don’t forget to be humble. Remember, success can be fleeting so don’t let your victories go to your head. As soon as things go downhill, the fall will be painful.

Being negative – no one wants to be around negative people. If you spend too much time being negative, even if things are tough, you’ll eventually drag everyone down with you.

Being a kiss-up – being a brown noser is one of the worst mistakes you can make for your career. Your co-workers won’t respect or like you and your relationship with your boss won’t be real, but rather based on superficial interactions.

Being complacent – complacency is harmful in any situation. As soon as you feel like you’ve arrived and put your career in cruise control so-to-speak you risk becoming complacent, and that can damage your career. It’s important to keep learning, continue improving and expanding your network. Don’t let complacency set in and stall your growth.

Promising too much – everyone wants to impress his or her boss and co-workers, but when you make promises you can’t deliver on you won’t impress anyone. You’ll do exactly the opposite and damage your reputation.

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Yacht Owners Feeling the Tax Pinch in French Riviera

The French Riviera is one of the most popular waterways in the world for high net worth individuals. Luxurious yachts dot the docks up and down these waterways, as some of the world’ wealthiest enjoy spending time basking in the sun. However, all is not perfect in this exotic location.

It appears the French government is putting the tax clamp down on yacht owners, and the wealthy are looking for other places to dock. According to reports, many yacht owners are fleeing the Riviera and heading for more tax-friendly docks in Spain and Italy.

According to several government officials in the region, the port of Saint-Tropez has already lost nearly a third of its business since the year began. Elsewhere, Toulon is hurting even worse, having lost 40 percent of its business in 2017.

So why are so many wealthy yacht owners fleeing the Riviera? It comes down to taxes, namely diesel taxes and the national insurance tax on any crew that lives in France. In fact, the insurance tax has jumped from 15 percent to 55 percent, meaning an owner’s insurance taxes for a crew of seven living in France could be as much as €300,000.

So if you’re looking for a good place to dock your luxurious yacht on the Riviera, you might want to check in with Italy or Spain, instead.

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What’s the Difference Between Avoidance and Evasion?

I love paying taxes, said no one ever.  The truth is given a choice everyone would most likely keep their hard earned money rather than give it to the government.  Unfortunately, taxes are a part of life and almost no one is exempt. However, figuring out how to pay fewer taxes is practically a national pastime.

Trying to keep your taxes as low as possible is no crime. In fact, when done correctly, often with the help of a professional, you can keep much more of your hard earned money than you might have expected. The key is doing it legally, which is called avoidance.

Avoidance sounds bad and you might think it is essentially the same as evasion. The reality, however, is that avoidance is totally legal while evasion is illegal. So how do they differ?

Avoiding taxes is the act of minimizing your taxes by using means approved by the IRS, such as tax deductions, taking tax credits and setting up tax deferral plans.  Businesses can also use tax avoidance measures, like leaving income in other countries in order to avoid being taxed on it in the U.S. These are all perfectly legal ways of to avoid paying higher taxes.

Evasion, on the other hand, is using illegal means to pay lower taxes or not pay them at all.  Providing false information about expenses or income or purposely paying fewer taxes than you owe are two common forms of tax evasion.

Essentially, if you knowingly report inaccurate numbers or fail to report your income, period, that is tax evasion and if the IRS catches you there will be consequences.

So, when you’re filing taxes you should definitely take every measure possible to avoid paying taxes. just make sure you don’t cross the line and become guilty of evasion.

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Real Estate Investors Saving Big on Taxes With Like-Kind Exchanges

If you invest in real estate then you might be aware of a little tax-friendly trick known as a like-kind exchange. This tax-saving tip can save real estate investors a lot of money every time they sell a property. Under normal circumstances if you sell a property and make a gain you have to pay taxes on the gain, even if you use the money to purchase another property.

However, if you sell one property and use the proceeds to acquire another property, under Section 1031 of the IRS Code, then you can delay the tax bill by using a like-kind exchange. This has been a priceless move for thousands of real estate investors for many years. That’s the good news.

The bad news is this little tax-saving trick might not be around too much longer.  That’s because it could end up on the chopping block after legislators in Washington finalize their tax reform. Thus, taking advantage of this tax break now is a good idea if you own property.

If you invest in real estate and are looking to replace one or more properties with different properties then now is a good time to meet with a professional tax advisor that can help you with this process. You will learn whether or not your properties qualify for this tax break and how you can get the most out of a like-kind exchange.

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New York Mayor Wants to Improve Subway System With the Wealthy’s Money

Have you taken a ride on New York’s Subway system recently? If you have then you might have noticed that it’s in need of some work. Like many other forms of infrastructure, the Subway is getting old and worn down from years of use and lack of upgrades and repairs.

Of course, this is a problem that the mayor of New York would like to fix. So how does Mayor Bill De Blasio plan to do this? As you might have guessed he wants to raise taxes. However, he’s not looking for everyone to help foot the bill. He wants the state’s wealthiest individuals to pay a little more to help improve the system for everyone else.

According to the recently announced proposal, the mayor wants to increase the tax rate on anyone that makes more than $500k from 3.876 percent to 4.41 percent. His plan would also assist in the funding of half-price subway and bus rides for as many as 800k of the area’s lowest income individuals.

However, governor Andrew Cuomo has stated that the city should take more responsibility for the subway by pulling more money from it’s own budget.  Meantime, De Blasio claims that his plan would increase tax revenue by $700 million in 2018 alone. If the plan were to become law, about 32,000 residents would be affected by the tax increase.
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