Are contributions to a special needs trust tax deductible? I am unaware, but a colleague found two links saying yes.

Forum|Forum|6 years ago
December 7, 2019
3 replies
12 views

two links referenced:

https://www.friendshipcircle.org/blog/2012/09/06/the-pros-and-cons-of-a-special-needs-trust-ensuring-your-childs-future/

https://www.waltar.com/advantages-disadvantages-special-trust/

Lacerte Tax

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Best answer by George4Tacks

NO

I do not see anywhere in those links that says tax deductible.

Such a trust is not a charitable organization. It's primary purpose is to protect assets and provide for the "Special Needs" of a disabled individual, without endangering government assistance for that individual. Whenever you stop and give something to that person with the cardboard sign, you are likely contributing to a special needs individual. If they add the words "contribute to my trust" would you think it to be a valid deduction?

T

TaxGuyBill

Level 15

Those links say the cost to CREATE the trust may be tax deductible (although that may not necessarily be the case in 2018), not that the money put into the trust is deductible.

T

troy1Author

Level 2

GREAT catch! Once you pointed that out, I totally agree with that assessment. Sometimes you can read something 20 times until you realize what it is truly saying.

George4TacksAnswer

Level 15

NO

I do not see anywhere in those links that says tax deductible.

Such a trust is not a charitable organization. It's primary purpose is to protect assets and provide for the "Special Needs" of a disabled individual, without endangering government assistance for that individual. Whenever you stop and give something to that person with the cardboard sign, you are likely contributing to a special needs individual. If they add the words "contribute to my trust" would you think it to be a valid deduction?

Answers are easy. Questions are hard!

S

sheila7000

Level 3

Yes, most definitely I believe that if the words "contribute to my trust" was added to the cardboard sign, that's a valid deduction.

Just the fact the person is using a cardboard sign in-and-of-itself is signal enough that we do NOT have enough incentives for the rest of us to be helping people w/ disabilities have a higher standard of living that is indeed also a happier standard of living (happier when the happen to have friends to share with !!! Difficult to have friends when you've nothing to share !!!)

Even under such "fantastic" circumstances, I'd much rather be the person WITHOUT a qualifying disability.

abctax55

Level 15

"....contribute to my trust" was added to the cardboard sign, that's a valid deduction.

@sheila7000 - Words on a cardboard sign do NOT make something deductible under IRC. I'd really hate for a future searcher to see your comment.

And FYI, this post is almost two years old. There's no reason to resurrect it.

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