GringoPost | Ecuador: Proposed senate tax bill - minefields ahead

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Proposed senate tax bill - minefields ahead

If you are considering making charitable contributions, you should make them this year as the Senate bill will do away with many deductions in favor of a higher Standard Deduction. Remember also, to qualify as a charity, the organization needs to have received a 501(c)3 status from the IRS. and any charitable gift in excess of $250 needs to be in writing.

Also, hidden in the Senate bill is the elimination of the "adequate identification rules" which basically says that if you sell a security, and you have 2 tranches, a low-basis and a high-basis tranche, you can pick the one that you want to sell. This also applies to charitable donations of stock. Currently, if you want to gift your low-basis shares to avoid paying the tax on the gain, you can choose your low-basis over your high-basis giving you a greater write-off. In 2018, under the Senate version, you won't have that option. It's going to come out of your low-basis shares first, which is good for charitable giving, but NOT a good result for investments. So, it is advisable as an "investment" to sell your low-basis stock this year and save your high-basis stock for 2018 and beyond.

Homeowners who sell their homes may not be able to get the same tax breaks they have received under current lax. Currently they can deduct the profits if it's been their primary residence for 2 out of the past 5 years. The tax reform bill changes that to 5 out of the past 8 years.

Tax rules change all of the time. If you want to stay current, I will be holding a "retired expat" seminar which will focus on areas we expats are most impacted by. Other areas for "non-retired expats" will be addressed such as, are you earning an income in Ecuador? If you have an interest, please email me.

The seminar is currently scheduled for Wed. January 10, 2018, 10 AM till noon, and held at the Vegetable Bar.

Wed. January 10, 2018 from 10 AM till noon, The Vegetable Bar

John Papile: ojohnnio@aol.com