By: Sam McBride, Commonwealth Financial Group (CBA Parent)
On November 29 th we have the wonderful opportunity to participate in Giving Tuesday! You may already know this, but since CBA is a qualified 501(c)3 nonprofit couples can give up to $600 in donations to 501(c)3s to be tax-deductible, even for families who do not itemize charitable donations. But what you
may not realize is that there is more than just this type of giving that you can do financially.
Here are a few creative ideas around giving to consider as we enter this season:
– Donation Bunching: combine two years of your donation instead of one year to help get over the charitable giving tax threshold.
– Gifting Appreciated Securities: if you have a nonqualified investment account, you may have holdings over the years that have appreciated greatly. If you sale an appreciated security you are subject to paying capital gains tax. If an apricated security is gifted to a charity, you don’t have to pay capital gains tax, and neither does the charity.
– Donor Advised Funds: you may not want to part with specific securities in your portfolio, so one other option is to create an investment account specifically for the charity you’d like to give to. This is where individuals can use a Donor Advised fund to reap similar tax benefits, but have a little more oversight to “when/how” the investments are given.
– Charitable Remainder Trust: Assets that can be donated to a charitable remainder trust include cash, stocks, real estate, private business interests, and private company stock and the grantor/trustor can receive a partial tax deduction. This is an irrevocable gift, but one that comes with the ability to retain income from the asset, while gifting it’s ownership to the charity.
Our hope is that you don’t read this and make your giving about financial gain and tax right offs, but rather that you consider the “ways” in which you can be generous and evaluate how and how much you feel led to give.