14 Mar Tax return reviews help level up your charitable giving plans
Tax time has its silver linings! Going over a tax return helps start a productive conversation about ways to plan your gifts to charity more effectively. As you scan 2023’s charitable contributions, Think about whether those charitable gifts were made with cash or with other assets and then what would be the most effective assets to give to charity during 2024 and beyond.
Here is a four-point checklist that can help you with the range of charitable giving options.
–Cash is not king when it comes to charitable giving. Cash is typically not the most tax-effective form of charitable giving. Instead, consider giving highly-appreciated assets, including publicly-traded stock, to your fund at the MCCF to support your favorite charities.
–Think even beyond stock. Contemplate not only highly-appreciated stock as a potential gift to charity, but also the various forms of “noncash” assets that can make great charitable gifts. After all, American households’ most valuable assets are retirement accounts and personal residences, not cash. Examples of assets that could be excellent charitable gifts depending on the client’s circumstances include gifts of real estate, closely-held stock, collectibles, and, for those who are age 70 ½ and older, direct transfers from an IRA (known as a Qualified Charitable Distribution) to a field-of-interest or unrestricted fund at MCCF.
–Make it easy on yourself. Reach out to our team for assistance! We are happy to help you evaluate the best assets to give to a donor-advised or other type of fund at MCCF to achieve your charitable goals.
–Close the loop on IRS reporting. Remember that the reporting requirements are different for noncash gifts to charity versus cash gifts. Make sure you are familiar with IRS Form 8283, which must be filed with any tax return claiming a deduction for noncash assets valued at $500 or more. The IRS expects strict adherence to the terms of the form, especially the requirement for a qualified appraisal. On our end, MCCF will handle the confirmation of receipt and a commitment to document and notify the IRS if disposition occurs within three years.
Opening up the full range of charitable giving options can help you structure a holistic estate and financial plan that meets the your objectives for family wealth, philanthropy, and tax effectiveness. Reach out anytime to our team to discuss techniques and strategies.
