An engagement ring is tax deductible
In the United States, an engagement ring signifies a commitment between two people with the intention to marry at a later date. Because that engagement rings are usually made of precious metals and precious stones are usually expensive and a pair can cost $ 20,000 or more. You can claim an engagement ring as a tax deduction depending on other individual circumstances.
Buying a ring
If you’re going to propose marriage to your girlfriend or purchased your engagement ring to show your commitment, you can not deduct the cost of the ring of your taxes. An engagement ring is considered an element of capital gain rather than a household item, making it unsuitable for achieving a deduction.
Donating a ring
You can choose to donate an engagement ring to a charity if you ended commitment without marriage, or has obtained a divorce and no longer want to keep the ring. In most cases, the donation represents a charitable contribution that can be deducted from your taxes for the year you donated the ring. However, for the ring you claim as a tax deduction, the charity must be able to use, sell ring or contribute to a charity not in use for a tax deduction.
The amount you can deduct from your taxes will depend in part on the value of the ring. If you get a certified appraisal of the ring, it can help you maximize your tax deduction if it had increased in value from the date of purchase. The cost of the appraisal can not be included in the deduction of a charitable contribution, however, you can deduct the cost as a miscellaneous deduction.
The IRS only allows you to claim the appraised value of an engagement ring donated if you had possession of the ring for over a year. Otherwise, you can only deduct the purchase price of the ring after donating to a charity. Also, if the value of the ring exceeds 50 percent of your adjusted gross income for the year, you can deduct only the part of the value that is equal to 50 percent of your adjusted gross income, less the value of any other charitable contribution you’ve claimed in the same tax year.