As 2024 draws to a close, you may be reviewing your tax projections to determine an ideal level of charitable giving before December 31. Before you start writing checks, stop to consider the many types of assets that might make even better gifts. If you have a fund at the Community Foundation or are interested in creating one, our team can help you and your advisors identify the best assets for year-end giving to grow your existing fund or open a new fund. We have highlighted two of the more common assets that you might want to consider. For a list of additional assets we accept, check out our Guide to Giving.
Donate appreciated stock.
We know how easy it is to simply write a check when you want to grow your fund with us or start a new fund. However, gifts of appreciated stock to a fund at the Community Foundation may be a more tax-savvy way to support your favorite charitable causes because capital gains tax can be avoided.
When you give shares of appreciated stock to the Community Foundation, the gift is valued at the fair market value of the shares on the date of transfer and you will receive a receipt for tax purposes. When we sell the shares and add the proceeds to your fund, no one is hit with capital gains tax.
By contrast, if you were to sell the shares yourself and then give the Community Foundation the proceeds from the sale, you would owe capital gains tax on the sale. If you have held the stock a long time and it has significantly gone up in value, you could face a big capital gains hit, and would end up making a much smaller gift to your fund.
Gifts of publicly-traded stock are easy to transfer to a fund. You can download the transfer instructions here, or you can contact Liz Paulhus, Director of Donor Services, at liz@cfov.org for a copy. Please let Liz know if you are transferring stocks so that the gift is appropriately directed.
Take advantage of Qualified Charitable Distributions.
Instead of receiving your IRA distributions and then cutting checks to charities, there is a smarter way to give that reduces your taxable income. If you are 70 ½ or older, you can make what is called a Qualified Charitable Distribution (QCD) for up to $105,000 from your IRA to any charity, including all funds at the Community Foundation except Donor Advised Funds. If you file taxes jointly, your spouse can also make a QCD from his or her own IRA within the same tax year up to $105,000 for a total of up to $210,000 a year. The QCD limit is annually indexed for inflation.
If you are subject to the rules for Required Minimum Distributions (RMDs), QCDs can count toward those RMDs.
Our team at the Community Foundation is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.