Considerations for Your Year-End Philanthropic Giving
There are many ways of deciding when and how to support the organizations and causes that are important to you – here are a few considerations as you begin to think about your year-end giving.
November 11, 2016
By Susan Peterson, Director, Gift Planning
We have arrived at the time of year when many individuals and families begin to consider their philanthropic giving they wish to make before 2016 comes to a close. There are many ways of deciding when and how to support the organizations and causes that are important to you – here are a few considerations that I hope will be helpful as you begin to think about your year-end giving.
Consult your CPA (or do some “number crunching” on your own) to determine whether there is an “optimal” amount of philanthropic giving this year from an income tax perspective. You could benefit from income tax charitable deductions associated with your gifts, depending upon your tax situation. This can be particularly helpful in high-income years, for example, if you have received higher-than-usual compensation from employment or have incurred taxable gains from the sale of a business or asset. Opening or adding to a fund at Seattle Foundation can be a convenient way of obtaining an offsetting charitable deduction and pre-funding future years’ philanthropic giving.
For the first year in quite some time, the so-called “IRA Charitable Rollover” is a permanent part of the tax code. If you are over age 70 ½ you are able to direct some or all of your IRA required minimum distribution (up to a maximum of $100,000 per taxpayer) to the public charity of your choice. This option is not available for contributions to donor advised funds. However, if you have a designated fund (established to support a particular philanthropy) or if you wish to make a gift to one of Seattle Foundation’s area of interest funds, you may make your gift through Seattle Foundation using this tax rule.
Whatever the size of your donations, be sure to consider using assets other than the cash in your bank account. Philanthropic contributions of appreciated assets such as low-basis publicly traded stock or investment property can be an excellent way to save taxes and maximize the benefit to the organizations that you support.
In addition, some public nonprofit organizations, including Seattle Foundation, are able to accept complex assets. One common form of complex asset is real estate (residential or investment); however, we can also accept a broad range of other non-cash assets, including business interests, art and collectibles. Resulting funds are often significantly greater than if you had sold the asset yourself and paid any associated taxes.
If you have any questions regarding year-end giving, we are happy to work with you and your team of professional advisors to determine the most tax-effective plan that meets your needs. Contact us at 206-515-2111 or email firstname.lastname@example.org.
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