It’s that time when many consider making year-end gifts to their favorite charities.
The Brainerd Lakes Area Community Foundation reports it helps make philanthropy easy and offers these suggestions to make charitable giving easier, in a news release.
Bunching gifts: Give multiple years’ worth of donations in a year when deductions are itemized. Then donate while taking the new higher standard deduction other years. A way to do this is with a Donor Advised Fund. Make one gift, take one large itemized deduction, and then support the chosen charities in ensuing years through the fund.
Giving from Qualified Funds. Those 72 or older must take an annual minimum distribution from their IRA. If the annual minimum distribution comes to the individual, it will be taxed. If the distribution is donated directly to charity, it is tax free. Qualified funds are also the best source of charitable giving from an estate for the same reason.
Donating appreciated assets. Donating appreciated stock (or real estate) allows the giver to deduct the full value; yet avoid paying capital gains on the gift. After a short waiting period, donors can repurchase the same stock at a higher cost-basis.
Set up a Charitable Gift Annuity. Those who rely on fixed income (CDs or bonds), the payout is currently very low. A Charitable Gift Annuity allows people to take a deduction, while earning lifetime income at a rate likely much higher than current fixed payout rates. After passing, the balance goes to their favorite charities through a charitable fund.
New tax law allows people to deduct $300 for charitable giving, even if they don’t itemize.
The Foundation can assist with all of the above options. Call 218-824-5633 for assistance.
