Best Assets for Charitable Giving at Year’s End

It’s difficult to increase itemized deductions, with one exception: the deduction available for qualified charitable contributions. Here are some ideas for augmenting your charitable deductions and increasing your support – by carefully choosing the assets you contribute.

  1. Stocks, bonds or mutual funds that have increased in value significantly – and that you have owned more than one year. You can deduct the present market value of these items, not just your original cost, and avoid capital gains taxes 100%.
  2. IRA funds, if you are over age 70½. Through the end of 2007, eligible donors can instruct IRA custodians to issue gift checks to qualified organizations (up to $100,000), and any amount we receive will be free of income taxes and future state or federal “death taxes.” If you have not yet taken your 2007 required minimum distribution, your 2007 taxable income will go down, as well.
  3. Surplus life insurance. Many people own policies purchased at a time when they had young families or other financial responsibilities. Gifts of policies that are no longer needed for their original purpose will generate charitable deductions, and any future premiums you pay will also be tax deductible.
  4. Stock in your business. Closely held stock often can be transferred with excellent tax results. These gifts require careful planning, however, and coordination with our office.
  5. Other investment assets that have grown in value. Real estate, artwork, collectibles and other investment assets that you have owned more than one year can be attractive for charitable giving but also require special planning. Please contact our office for details.
  6. Cash. Most Americans simply write checks to support their favorite organizations, and cash gifts are both highly deductible (up to 50% of the donor’s adjusted gross income) and easy to transact. Checks that are mailed and postmarked before January 1, 2008, will be deductible on your 2007 tax return.

 

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