Have you given any thought to your year-end charitable gifts yet? With the recent tax law changes, the Oklahoma City Community Foundation recommends these giving options for smart taxpayers who want to maximize their charitable deductions.
An estate planning attorney and certified financial planner, Joe Crosthwait recognizes the importance of charitable gifts that not only support community nonprofits, but also alleviate a tax burden for the donor. In 2017, Joe and his wife, Sherry, ‘bundled’ several years’ worth of charitable gifts to establish an advised fund at the Oklahoma City Community Foundation. The Crosthwaits received a charitable tax deduction for their gift in 2017, and look forward to using the fund to support their favorite charities this year and in years to come.
With the recent increase in the standard deduction, many donors are using advised funds to “bundle” charitable gifts for several years into one calendar year. This strategy allows you to exceed the standard deduction in one tax year, while using an advised fund to support your favorite charitable causes over several years.
“Bundling charitable gifts from multiple years allows us to maximize our charitable tax deduction while still making annual gifts to support our favorite charities. Instead of gifting cash every year, we use our advised fund to make our regular donations. Every few years, we plan to reload the advised fund using our annual income, exceeding the new standard deduction to receive a tax break for that year. It’s a win-win!” – Joe Crosthwait
By making a charitable gift of appreciated assets including real estate, oil and gas royalty interests or widely- and closely-held stock, bonds and mutual funds, you can potentially avoid capital gains tax, preserve your current cash flow and generate a charitable tax deduction.
“By gifting appreciated assets, we were able to save money on capital gains tax while creating a lasting source of income for an institution we adored. The transaction was also painless and easy, which was a major perk for us.” – Larry Davis
The recent increase in charitable gift annuity rates makes these life income gifts even more beneficial for those over retirement age. By making a gift of cash or other assets, you can create a lifetime income stream for yourself or a loved one, receive a charitable tax deduction and support he causes you care about. Learn more about charitable gift annuities.
“My wife, Vibha, and I created our charitable gift annuities to offset our annual tax liabilities. As a bonus, CGAs offer a guaranteed income stream for life, which normally pay a rate of return much higher than I could get in other fixed income vehicles. Not only does it help eliminate our tax liabilities, but ultimately the gift supports the causes and charities we adore – like scholarships for deserving students.” – Dilip Patel
If you are age 70 ½ or older, you can gift up to $100,000 per year directly from your IRA to the Oklahoma City Community Foundation to support or create a new scholarship fund or a charitable organization endowment fund. By using your pre-tax IRA assets, your charitable gift costs you less. In addition, IRA Rollover gifts can be used to meet your required minimum distribution and are not subject to income taxes.
“Planning ahead each year for an IRA Charitable Rollover gift helps our charitable dollars go further. The gift isn’t an out-of-pocket expense, it helps lessen our tax burden and most importantly allows us to support scholarships for students who were in foster care.”
– Janice Haunschild
To learn how we can help you with your year-end giving, contact Joe Carter at 405/606-2914. We look forward to helping you meet your year-end goals!
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