Could I screw myself with my own money?
November 28, 2006 4:19 PM Subscribe
I've got $20,000 coming to me, and this may possibly be a bad thing. Mature Bonds vs. Charity filter...
I currently receive medication every few weeks through an IV. This lovely, lifesaving drug is a couple of grand a pop. I would never be able to afford it, even the lower copay through my insurance, except that the clinic I where I get it gives it to me for free and takes it as a tax write-off.
I have a $20,000 bond that just matured. I'd like to cash it, use about 4 grand to pay remaining student loan and credit card debt, and put the rest back in CDs or somesuch thing.
Here's the question:
If I cash this bond, will it affect my status with the clinic? Could I lose my "charity" status?
I currently receive medication every few weeks through an IV. This lovely, lifesaving drug is a couple of grand a pop. I would never be able to afford it, even the lower copay through my insurance, except that the clinic I where I get it gives it to me for free and takes it as a tax write-off.
I have a $20,000 bond that just matured. I'd like to cash it, use about 4 grand to pay remaining student loan and credit card debt, and put the rest back in CDs or somesuch thing.
Here's the question:
If I cash this bond, will it affect my status with the clinic? Could I lose my "charity" status?
Response by poster: I don't know, I'm not very good at this, but the we did have to go through a bunch of hoops with the clinic to get my charity status, including tax returns. I assume that the government will make a note that I'm "cheating" (even though allll that money wouldn't even last four treatments).
posted by josingsinthehall at 4:29 PM on November 28, 2006
posted by josingsinthehall at 4:29 PM on November 28, 2006
It completeley depends on the charity's policy. Is it based on income alone or income and assets? And what are the income and asset levels? Do you have to requalify on a yearly basis, and when is the next date that you'd have to give them info?
If it's based on tax forms, will this cash out be on your 2006 return somewhere, and when would you have to show it to them? By the time you'd need to requalify, will you be in a stronger financial position or with different insurance, so you won't need them anymore?
Read all the fine print and good luck.
posted by saffry at 4:44 PM on November 28, 2006
If it's based on tax forms, will this cash out be on your 2006 return somewhere, and when would you have to show it to them? By the time you'd need to requalify, will you be in a stronger financial position or with different insurance, so you won't need them anymore?
Read all the fine print and good luck.
posted by saffry at 4:44 PM on November 28, 2006
Did they know you had that bond back when you were jumping through the hoops? Because you're really no better off now than you were back then, unless someone gave you the bond in the meantime. You'll have to show some interest income on your tax return, but again, unless this is a gift, you won't have a gain of $20,000 to report.
posted by jaysus chris at 4:46 PM on November 28, 2006
posted by jaysus chris at 4:46 PM on November 28, 2006
When a bond matures, you aren't receiving income. You're converting an asset from one form into another (cash).
Only the coupons or dividends are considered income.
And a gift from another person, bought with after-tax dollars, is not taxable.
posted by randomstriker at 4:52 PM on November 28, 2006
Only the coupons or dividends are considered income.
And a gift from another person, bought with after-tax dollars, is not taxable.
posted by randomstriker at 4:52 PM on November 28, 2006
Can you clarify whether you had the bond when you gained your charity status? The maturing of the bond hasn't made you any richer, just more liquid.
posted by winston at 4:59 PM on November 28, 2006
posted by winston at 4:59 PM on November 28, 2006
Response by poster: I've had the bond from well before the onset of my disease, but I don't know whether it was puchased with after-tax funds. This is also the first year I've had the charity help, so I don't know whether I have to apply yearly (I think so). I guess I need to find out a lot more information.
Thanks for all your help so far, you guys (and I'll take more if you've got it). At least I know where to start. *sigh*
posted by josingsinthehall at 5:59 PM on November 28, 2006
Thanks for all your help so far, you guys (and I'll take more if you've got it). At least I know where to start. *sigh*
posted by josingsinthehall at 5:59 PM on November 28, 2006
This thread is closed to new comments.
posted by enrevanche at 4:26 PM on November 28, 2006