Charitable Planning

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Three Year-End Charitable Giving Ideas

During this holiday season, many of us consider making charitable donations to a favorite cause or institution. In fact, according to the Giving USA Foundation’s annual report, American individuals gave $292 billion to charity in 2018.1 Many of the donations were large gifts as opposed to a few dollars here or there. If you’re considering making a significant gift, keep in mind these three strategies that could help both you and your charity of choice.

Donate Appreciated Assets

Some economic indicators suggest that we may be approaching the end of the longest bull market in history. Now would be a perfect time to consider donating appreciated assets—like stock that has grown in value—to not only support your favorite charity, but also receive a tax deduction and eliminate a future tax liability.

For example, let’s assume you have a stock worth $50,000 with a cost basis (the purchase price) of $20,000. If you sold the stock today, you would pay capital gains tax on the $30,000 gain. Assuming a 15% capital gains tax rate, the tax would be $4,500. However, if you direct your broker to transfer the stock directly to the charity, you receive a deduction for the entire $50,000 gift and the charity pays no tax on the subsequent sale.

On the other hand, if you want to donate a stock that declined in value, you would be better off selling it yourself and using the loss to offset other gains or to generate a deduction for yourself before donating the net cash.

Heap Your Donations

For 2019, to receive a deduction for charitable gifts over the standard deduction, you must be able to itemize your deductions. The chart below shows the standard deduction for the various filing statuses:

Filing Status Standard Deduction Amount
Single $12,200
Married Filing Jointly & Surviving Spouse $24,400
Married Filing Separately $12,200
Head of Household $18,350
Source: Internal Revenue Service

Let’s assume that you and your spouse are contributing $6,000 per year to your church. Since this amount is below the Married Filing Jointly standard deduction of $24,400, you would receive no additional deduction other than the standard $24,400. On the other hand, if you were capable of “heaping” the next five years into 2019, you could donate $30,000 before year end and take a deduction for the full amount. Do a quick check with your accountant to make sure the strategy works for your personal situation.

Donate Part of Your IRA

Typically, when a taxpayer reaches 70½, they are required to begin taking required minimum distributions (RMDs) from their IRA accounts, which are fully taxable. However, in 2015, a minor change to the tax law allowed taxpayers over 70½ to transfer up to $100,000 annually from their IRA directly to a charity, tax free.

In situations where these retirees don’t need the additional income, it may be more tax efficient to have the RMD amount (or more) transferred directly to the charity of their choice as a charitable rollover. This strategy satisfies the RMD requirement without generating additional taxable income to the owner.

Making a financial gift to a worthwhile charitable organization can be a game-changer to the organization itself. More likely, your holiday season will take on a distinctly different feel, knowing that you shared your wealth with those who need it more.

1 Giving USA 2019: The Annual Report for Philanthropy for the year 2018, IUPUI Lilly Family School of Philanthropy, 2019.

De-risking a Concentrated Stock Position


It’s so simple it’s scary.

Clients with a concentrated stock position that is intended to transfer to family and/or charity may be able to potentially increase the per share value of the transfer while de-risking the portfolio by using life insurance.


It’s so simple it’s scary.

The Twelve Ways of Gifting

In the spirit of the holiday season, here’s a run-down of The Twelve Days of Christmas.

Oops, I mean The Twelve Ways of Gifting…