News

MVP Spotlight: Financial Life Advisors
A Paid Advertorial: Three of the Best Methods to Give to Charity Under the New 2018 Tax Code
 
Published Sunday, July 1, 2018 8:00 am
by Ben Gurwitz CFP Senior Wealth Manager, COO & Partner, Financial Life Advisors

Let’s face it, giving to good causes isn’t about tax breaks, it’s about making an impact for something one  believes in and cares about. Being smart about the tax code allows one to pay less in taxes, thus giving more to the charitable cause. The new tax code, which took effect in 2018, makes it challenging to qualify for charitable deductions on one’s tax return. Many taxpayers who once itemized will no longer be able to. Traditional deductions such as  State and local taxes have been capped and other deductions removed entirely.

  • The bottom line is that to get the most benefits for charitable contributions under the new rules, you’ll want to know which ones help you the most.
  1. Charities are tax-exempt, so when they sell gifted assets, they don’t pay tax when they are sold. When you give assets that have appreciated to a charity, your gift is for the current value of the donation and you have side-stepped any capital gains tax. As an example, if you purchased a stock at $10 and it was now worth $100, you could give that stock to charity and receive the value of a $100 charitable contribution but not have to sell the stock which would have triggered a $90 capital gain.

 

  1. The difficulty in itemizing to take a charitable deduction is leading to a rise in use of the Donor Advised Fund (DAF) as a tool to “bunch” donations, thereby more easily reaching the new itemized thresholds and getting tax benefits for your gifts. Using a DAF allows you both to gift property to a DAF, which is a qualified charity, and to leave the money invested in a segregated account until you make grants to your charities later. Using a DAF, you can bunch many years’ worth of charitable gifts and receive a single, large charitable deduction. You can even combine a DAF with gifting appreciated stock to get both the deduction for gifting and side-step capital gains at the same time.

 

  1. You must be at least 70 & ½ and have an IRA for to take advantage of this now permanent rule that permits a non-taxable distribution for gifts made directly to qualified charities. If you distribute a portion of your IRA directly to a charity, the distribution is not reported on your tax return and even counts towards satisfying RMDs (Required Minimum Distributions). There is a $100,000 limit per year (Married couples may do up to $100,000 each) This is known as a Qualified Charitable Donation (QCD).

 

The Barshop JCC is a 501(c)(3), which means all gifts to the Barshop JCC are tax deductible. Aliyah Kuchinsky, Director of Corporate and Community Engagement, can provide instruction on gifting appreciated assets or making a QCD directly to the Barshop JCC. Make the most of your gifts!

 

NOTE: Neither Ben Gurwitz, CFP® nor Financial Life Advisors are licensed to, or give tax advice. You should consult a tax professional before implementing any of the discussed actions.

 www.FLAdvisors.com


Send this page to a friend

Back to top