It's a win-win to make a difference in the lives of children, while also lowering your tax burden simultaneously. Whether it is by way of donating appreciated securities or property, utilizing required minimum distributions (RMDs) from a retirement plan, or through a charitable gift annuity, there are options to maximize the intended impact of your gift while realizing other financial planning and tax-saving benefits.
GIFTS OF APPRECIATED CAPITAL ASSETS
When you donate long-term appreciated assets like bonds, stocks or real estate to charity, you generally don't have to pay capital gains, and you can take an income tax deduction for the full fair-market value of the donated asset up to a percentage of your adjusted gross income. You won't have to deplete your cash accounts to make the gift, which can give you more financial flexibility.
QUALIFIED CHARITABLE DISTRIBUTIONS FROM IRA REQUIRED DISTRIBUTIONS
In addition to the benefits of giving to a charity, a QCD excludes the amount donated from taxable income, which is unlike regular withdrawals from an IRA. By lowering your adjusted gross income, the QCD rule can effectively reduce your income taxes.
CHARITABLE GIFT ANNUITY
A charitable gift annuity may be a good option if you want an immediate charitable deduction but also want to secure a source of lifetime income for yourself and another beneficiary. It is also a good option if you want to eliminate potential capital gains tax and support a charity with a significant donation.
Big Brothers Big Sisters and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for general informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Please consult your own tax, legal and accounting advisors before acting on the information provided herein