Members of the Maryland Association of Certified Public...

Tax questions

March 04, 1997

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q. In 1996 I made a contribution to the National Park Service toward restoration of the C&O Canal, which had been damaged by floods. Is that a legitimate deduction for both federal and state returns?

A. Yes, payment to the U.S. (National Park Service) is deductible, but only if the gift is exclusively for public purposes. Verify whether payments are actually paid to a nonprofit organization set up to receive tax deductible contributions. If so, it would be deductible.

Q. Since June, I have been living outside of the country and receiving a student stipend through a foreign university. Do I have to pay any sort of taxes on the money that I have received since leaving the country?

A. The stipend is taxable if you are not a degree candidate. If you are a degree candidate, payments for tuition, fees, books, supplies and equipment are tax free. This exclusion does not apply if payments are for teaching, research or other services that are conditions of the stipend. If the payment is for services rendered, it may qualify for the foreign earned income exclusion whether or not you are a degree candidate.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial at (410) 783-1800. Call 268-7736 in Anne Arundel County, 836-5028 in Harford County and 848-0338 in Carroll County. Using a Touch-Tone phone, punch in the four-digit code 6225 after you hear the greeting.

Readers also can e-mail questions through The Sun's Web site -- www.sunspot.net.

Selected questions will be answered in the Business section. No questions will be answered by phone.

rTC Pub Date: 3/04/97

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