A Heads-Up on Charitable Gifting

A Heads-Up on Charitable Gifting

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Many people don’t start to think about charitable gifting until late fall or early winter, but just like “Christmas in July,” we want to make sure clients are aware of some new and not-so-new gifting rules:

•    This past December, Congress made the IRA Charitable Rollover (or Qualified Charitable Distribution, QCD) permanent. This allows gifts of up to $100,000 from an IRA that will not be included in taxable income but will satisfy required minimum distributions for those who are 70½ and older. It does not result in a charitable deduction, but often the decrease in taxable income is a significant benefit.

•    Remember that you can gift appreciated stock and save yourself the realized gains tax! Almost all charities will accept gifts of stock – so before you get out your checkbook for larger amounts, talk to your portfolio manager, and we can help you choose and do the paperwork to donate stock. Stock gifts do qualify for the charitable deduction, and the charity will get the stock’s full value without your getting taxed on the gain.

•    Consider a donor-advised fund (DAF) if you want to make a larger gift in one year for tax planning but aren’t ready to decide the exact charities or want to simplify the execution of these types of gifts. Contributions to a DAF count for the deduction in the year made, while you can advise the administrator when and where to direct the charitable gifts. We are happy to help you understand the pros and cons of a DAF, as well as find some options for administrators.

Feel free to reach out to your Clean Yield portfolio manager to discuss giving at (802) 526-2525. We are happy to help set up paperwork, choose securities to donate, and discuss strategies that will provide both high impact and tax advantages.

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