Make the most of your tax possibilities with the help of experts
The Income Statement is a process that all taxpayers are required to carry out every year. However, many of us do not know how to take full advantage of the deductions and compensations that the law allows us to reduce our tax bill. One of the options that we often overlook is the possibility of compensating personal income tax losses by donating a property.
In this post, we will explain how you can take advantage of this option to reduce your taxes and, at the same time, help a charitable cause.
What is the compensation of losses in the IRPF?
Before going into details, it is important that you understand what the compensation of losses in personal income tax is. In simple terms, it is the possibility of offsetting capital losses against profits obtained in the fiscal year. In other words, if you have suffered economic losses during the year (for example, due to the sale of a property at a loss), you can offset them against any profit you have obtained (for example, thanks to the rental of another property).
In this way, you can reduce the amount of your taxes, since the compensated losses are subtracted directly from the tax benefit to be taxed.
How does the donation of a property work to offset losses in personal income tax?
Now that you know what the compensation of losses in personal income tax consists of, we are going to see how it can be applied in the case of a property donation.
The donation of a house refers to the transfer of real estate from an individual to a non-profit entity (such as an NGO or a foundation) without receiving financial consideration in exchange. In this case, the beneficiary entity is responsible for using the property for social, cultural or environmental purposes.
The donation of a house is not only a solidarity action, but it can also mean a reduction in your taxes. According to tax regulations, the amount of the donation can be deducted in the Income Statement as a deductible expense. This amount will be subtracted directly from the tax benefit to be taxed, which means that you could get a reduction in your taxes equivalent to the value of the donated good.
In addition, if you have suffered property losses in the tax year in which the donation is made, you could offset them against the tax benefit obtained. In other words, the losses could be subtracted directly from the amount of the donation, which means that you could get an even bigger reduction in your taxes.
Keep the following in mind
It is important to keep in mind that in order to deduct the donation it is necessary to comply with certain legal requirements. For example, it is necessary that the beneficiary entity be registered in the Register of Entities of Cultural, Social or Environmental Interest, and that the donated goods be used for cultural, social or environmental purposes. In addition, it is important to carry correct documentation that proves the donation.
In conclusion, donating a property to a non-profit entity can be an excellent way to reduce your taxes and at the same time help a charitable cause. In addition, if you have suffered property losses, the donation would allow you to offset them against the tax benefit obtained. However, it is important to keep in mind that in order to deduct the donation it is necessary to comply with certain legal requirements.
At Cartagena Homes, we are specialized in helping our clients make the most of their tax possibilities. If you are interested in compensating your personal income tax losses by donating a property, do not hesitate to contact us.
Other ways to compensate for personal income tax losses
In addition to donating property, there are other ways to compensate for personal income tax losses that are worth mentioning.
Investment in productive assets
One of them is investment in productive assets, such as companies or entrepreneurial projects. By investing in these assets, you are not only helping to finance innovative projects and boost economic development, but you can also offset any property losses you have suffered during the fiscal year.
For example, some investments through venture capital funds, shares in capital companies or seed capital, allow investors to offset personal income tax losses with the capital gains obtained in the operation. However, it is important to note that these investments are high risk and it is essential to be well informed before making a decision.
Acquisition of depreciable assets
Another option to offset personal income tax losses is through the acquisition of depreciable assets, such as investment assets or real estate for lease. The amortization of these assets can be deducted in the Income Statement as a deductible expense, which makes it possible to offset the property losses suffered in the fiscal year.
Any of these options requires good tax planning and in-depth knowledge of the regulations, so it is advisable to have the advice of experts in the field. At Cartagena Homes, our team of professionals is at your disposal to help you make the most of your tax possibilities and advise you on choosing the most suitable option for you.
If you want to know more…
In summary, there are several legal ways to offset losses in personal income tax, from donating property, investing in start-ups or buying depreciable assets. It is important to consider these options in a planned way and have expert advice to make the most of tax possibilities. If you are interested in reducing your taxes and looking for ways to offset your losses, do not hesitate to contact Cartagena Homes to receive personalized advice.