For individuals qualified contributions are not subject to the overall limit on itemized deductions or the 50% adjusted gross income (AGI) limit. A qualified contribution is a charitable contribution paid in cash or by check after August 27, 2005, and before January 1, 2007, to a 50% limit organization (other than section 509(a) (3)).
Your deduction for qualified contributions is limited to your AGI minus your deduction for all other charitable contributions. You can carry over any contributions you are not able to deduct for 2005 because of this limit. In 2007, you can carryover of unused qualified contributions subject to 50% limit.
The following are special standard mileage rates in effect in 2005 and 2007 for the cost of operating your automobile for providing charitable services solely related to Hurricane Katrina.
• 29 cents per mile for the period August 25 through August 31, 2005.
• 34 cents per mile for the period September 1 through December 31, 2005.
• 32 cents per mile for the period January 1 through December 31, 2007.
You can exclude from income amounts you receive as mileage reimbursements for the use of a private passenger automobile for the benefit of a qualified charitable organization in providing relief related to HURRICANE Katrina during the period beginning on August 25, 2005, and ending on December 31, 2007. You cannot claim a deduction or credit for amounts you received as a mileage reimbursement. You must keep record of mileage driven, time, place and purpose of mileage. The excluded amount is not exceeding the standard business mileage rate for expenses incurred during the following periods.
• 40.5 cents per mile for the period August 25 through August 31, 2005.
• 48.5 cents per mile for the period September 1 through December 31, 2005.
• 44.5 cents per mile for the period January 1 through December 31, 2007.
Any taxpayer who engaged in a trade or business is eligible to claim a deduction for a contribution of “Apparently wholesome food” inventory to a qualified charitable organization described is section 501(c) (3) after August 27, 2005 and before January 1, 2007. “Apparently wholesome food” means is food that meets all quality and labeling standards as per federal, state, and local laws.
• The deduction is equal to the lesser of the basis of the donated food plus one-half of the gain that would have been realized if the donated food had been sold at fair market value on the date of the donation.
• Two times the basis of the donated food.
Note: For getting this benefits, the taxpayer must received written certification from the done stating:-
• The donated food is related to the purpose or function of the donee’s basis for exemption under section 501(c) (3) and is to be used solely for the care of the ill, the needy, or infants and
• The food was not given in exchange for money, other property, or services.
For taxpayers who suffered casualty or theft losses to property owned for personal use which are attributable to Hurricanes Katrina, Rita and Wilma, a recent change to the tax law removes certain loss limitations.
Ordinarily, to figure a deduction for a casualty or theft loss of personal-use property from a particular disaster, taxpayers must reduce the loss by $100 and also reduce their total casualty and theft losses by 10 percent of their adjusted gross income. Only the excess over these $100 and 10 percent limits is deductible. Recent legislation, however, removes these limits for Hurricanes Katrina, Rita and Wilma on losses of personal-use property, so that the entire amount of unreimbursed losses is deductible.
Note: To qualify, a loss must arise in the Hurricane Katrina disaster area after August 24, 2005 and must be attributable to Hurricane Katrina, or arise in the Hurricane Rita disaster area after September 22, 2005 and must be attributable to Hurricane Rita, or arise in the Hurricane Wilma disaster area after Oct. 22, 2005 and must be attributable to Hurricane Wilma.
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