Tuesday, September 29, 2015

Estate Loses Income Tax Deduction For Large Contributions To Churches Because of Will Challenges

In Estate of DiMarco v. Commissioner, (T.C., Sept. 21, 2015), the U.S. Tax Court denied the estate of John DiMarco a deduction on its 2010 income tax return for a $314,942 contribution to two churches.  DiMarco's will left his residuary estate to the churches he attended regularly at the time of his death. The Tax Court held that because of various challenges to the will, it was not clear until 2013 that the churches would receive the contributions.  Thus presumably any deduction would have to be taken in that year, if income was available to offset against the deduction. The court affirmed the tax commissioner's assessment of a $108,588 deficiency for 2010.