If you wait until the end of the year to “figure out” your charitable giving, you are not alone. An astonishing 30.8% of all charitable gifts are made in December! And 12% happen in the last three days of the calendar year!
If you are just beginning the process of thinking about your year-end gift to Friends of the Verde River and your other favorite nonprofits, here is some information to consider and take to the professional advisors who guide your giving decisions.
- The CARES Act, in response to the pandemic and its crippling effect on so many nonprofits, offers a 100% adjusted gross income deduction for cash gifts made in 2021. THIS OPPORTUNITY EXPIRES ON 12-31-21.
- Many prefer to make gifts of appreciated stock that they have owned for more than a year. That’s understandable given the tremendous growth of the markets in the last year or more. If you sold the stock and gave the proceeds, there would be a capital gains tax of 20%. And most indicators are that Congress is planning to raise the capital gains rate soon. A gift of longterm appreciated stock to FVR can net a charitable deduction of the full fair market value if you itemize your taxes – and completely avoid the capital gains.
- Speaking of avoiding taxes: Do you have a Required Minimum Distribution (RMD) from your IRA? Have you taken it yet for 2021? It’s not too late to give all or part of it as a Qualified Charitable Distribution (QCD) to Friends of the Verde. You do not pay income tax on any amount given as a QCD. Whether you itemize your taxes or not, if you live in RMD-land, it makes good sense to use your IRA for your charitable contributions.
As you, your family, and your gift planners consider what is best for you in 2021, please let us know if we can offer you any additional information to aid you charitable giving processes. Call Kegn Moorcroft at 928-274-2077 with your questions.
This is not intended as legal or financial advice and should be considered as informational and educational only.