At the end of each year, Americans typically increase their giving. They do so for a variety of reasons, the most common of which is to further the work of a worthy charity. In turn, giving produces great personal blessing and joy. There are a variety of options by which people can give at year end.
This is the most common and simplest method. Americans give on average 2% of their adjusted gross income (AGI), but the law allows people to deduct up to 50% of their AGI. It is often advisable just from a tax perspective to give 10-15% of one’s income.
Gifts of securities
Gifts of securities include publicly traded stock and mutual funds. The best stocks to donate are those which have appreciated in value. Donate the stock before they are sold to achieve the maximum tax advantage.
Gifts of Cars, Boats, Timeshares and Personal Property
An often overlooked gift is a car, boat or other personal property. These gifts might include stamp collections, coin collections, timeshares, jewelry, or other collectibles.
Gifts of Real Estate
Property which is not subject to a mortgage may be an attractive gift option. Your deduction is based upon the fair market value of the property. Keep in mind that you may also donate partial gifts of real estate even if the real estate is not sold.
Gifts of Closely Held Stock
Closely held stock, including LLC, LLP, C corporation, and S corporation stock may be donated. Your deduction is typically based upon the fair market value of the stock. Like real estate, you may donate a partial interest. This may include donating minority, non voting interest.
Gifts that Provide Income
You may donate cash or non cash interests and actually create an income stream for yourself. The income may be fixed or variable.
Gifts from Your IRA
With the Pension Protection Act of 2006, if you are age 70 and ½ or older, you can make a gift of up to $100,000 using funds transferred directly from your IRA without incurring income tax consequences.
Call us at (913) 310-0279 or talk to your advisor about how to maximize your giving.