This is a question about Step Transactions. IRS, USA.
Suppose I am retired and of limited income, so my tax bracket is about 10% and I don't itemize.
I want to give $10,000 to a 501(c)(3) charity. But I won't get any tax benefits if I do, because that won't overcome the new itemization threshold of $12,000.
My plan is to give the money to Judy, who will then give it to the Nature Conservancy. Judy is in a 32% tax bracket, so will get back $3200 of net tax benefits. My gift isn't taxable income to Judy, since it's under the $15,000 gift tax exclusion.
Judy's onward gift is not optional. She must agree to donate it or no deal.
Does this violate the "Step Transaction Doctrine"? Effectively Judy is getting $3200 knocked off her taxes that I am not eligible to take.
Second scenario. Suppose I am an old-school conservative and believe in conservation, but the new conservatives would be gravely offended to see me donating to the Nature Conservancy. That would hurt my planned State Senate run. This motivation is entirely innocent, and the tax benefit is an unexpected side-effect. Does that change the picture?