Charitable donations are normally gifts of cash or property that gets made to a nonprofit
and the donator gets nothing of value or services in return (Investopedia Team, 2022).
This is normally used to reduce federal tax returns which is why many people prefer to
give to charity instead of paying taxes at times (Investopedia Team, 2022). Unfortunately,
Muhammad will not be able to receive these benefits because the IRS rules require that
the donation needs to be made to a registered charity (Moss, 2022). This can be found in
IRS tax publication 526 t which has a limited but specific international charity (Moss,
2022).
However, there is the option of donating in his will instead of through charity
while he is alive is a much better option. When donating through your will there are less
stringent restrictions when it comes to who you can donate to (Thrivent, 2023). This will
allow more to be given to the foreigner foundation of his choice (Thrivent, 2023). Though
he will have to pay income taxes this will save a lot of money from the gift tax that he
will need to pay if he goes through with it while he is alive (Thrivent, 2023). He could set
up a Charitable trust if he feels as strongly as he does with the foundation (Wong, 2023).
This way over the course of 20 years he could continue to give to his foundation (Wong,
2023).
Investopedia Team. (2022, November 22). Charitable Donation: Definition, Examples,
Tax Deduction Rules. Investopedia. Retrieved June 1, 2023, from
https://www.investopedia.com/terms/c/charitabledonation.asp
Moss, W. (2022, December 12). How Charitable Giving Can Impact Your Taxes. The
Balance. Retrieved June 1, 2023, from https://www.thebalancemoney.com/how-
charitable-giving-can-impact-your-taxes-1289751
Thrivent. (2023, February 28). How To Donate to Charity in Your Will | Thrivent.
Retrieved June 1, 2023, from https://www.thrivent.com/insights/generosity-
giving/how-to-donate-to-charity-in-your-will
Wong, B., JD. (2023, May 11). Charitable giving in trusts. LegalZoom. Retrieved June 1,
2023, from https://www.legalzoom.com/articles/charitable-giving-in-trusts
