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Charitable Gifts
So you want to make a charitable gift. Here's how to do it.
Many people are generous of heart and want to benefit their community. People might give to their church, mosque or synagogue, their university, a hospital, an arts organization, or any one of a number of worthy causes.
There are many ways of making charitable gifts. Some are smarter than others. Of course, we can always give cash or write a check. It is quick and easy, but it is not usually the smartest way to give.
If you have assets that have appreciated in value, giving those assets as opposed to selling them and giving the proceeds would be a better way to go. If you do this, the capital gains tax that you would pay upon sale is eliminated. Doing this gives the donor both a savings on capital gain and an income tax deduction for the charitable gift.
Another smart way to give is to name the charity of your choice as the beneficiary, or partial beneficiary, of retirement plan assets, such as an IRA, 401(k), or a Keogh plan. Upon death the amount given to charity is not taxable in the estate, the organization receives the full amount of the money and beneficiaries are excused from paying the tax associated with the deferred income that has built up in these plans to the extent of the gift.
Other smart ways of giving include giving property but retaining the right to use it for your life. This type of gift gives you an immediate income tax deduction and also allows the donor to continue to benefit from the property. Giving life insurance to a charity gives you an income tax deduction today for a gift that will pay when you die. A charitable remainder trust is a way to give property away but maintain an income stream as long as you live. A gift annuity is a great way to give money to charity that would otherwise be tied up in a bank CD. A gift annuity will probably pay more than a bank CD and also allow a charitable tax deduction. The proceeds from a gift annuity can also be used to replace the value of the gift through life insurance which passes with favorable tax treatment to the beneficiaries you name.
Another intriguing way of making charitable gifts is through a charitable gift fund. Through these funds you can maintain some degree of control over how the money is invested until such time as the charity receives the money. The charitable gift deduction is immediate, however. So you get the opportunity to give but continue to manage the way your gift is invested. Many charities offer these types of funds and some investment companies do, too.
Michael Wald can help you with any of these charitable gifts. Call him before you make a gift so that he can advise you on how to make it in the smartest way.
Please complete the fields below if you'd like more information about Michael Wald, his areas of expertise and the ways he may be able to serve you.
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