Charitable Giving: Plan out your deductions

cHARITY GIVING: plan out your deductions

A lot of us would like to give to charity and leave a legacy that engages their community. However, there are often ways to maximize gifts to a charity while also taking a large tax deduction for yourself. Thus your gifts could be even larger long term or even benefit you financially. There are some planning tips and tricks you may want to consider:

Understand your tax deductions, some general ground rules to explore:

• Get a Receipt and/or independent appraisal
• Understand the limits on your AGI for these deductions with the 5 year carryover, in general:
• You can generally donate Appreciated long-term capital-gain property without recognizing capital gains
• You need to be able to itemize your deductions

• 50% limit for deductions unless cash which could be 60% of AGI
•Appreciated assets are usually limited to 30% of AGI
•Private Foundations could further reduce these limits

• Qualified charitable deductions: The ability of individuals 70 ½ and older to donate to a charity directing from qualified plans like an IRA and without counting it as taxable income. Generally, up to $100,000
• Split-Interest strategies can be used for situations like having an asset provide you income while also being donated to charity and potentially getting an upfront tax deduction. Some strategies are call:

• Charitable remainder trusts (CRTs)
•Charitable lead trusts (CLTs)
• Charitable gift annuities

•Donor-Advised Funds similar to you creating a personal endowment for a charity where you donate assets, maintain control over the investing and then dole out the funds to a charity as you or your future generations deem appropriate under IRS rules. However these can’t typically be used for qualified monies like an IRA.