7 Surprising Opportunities for Year End Tax Savings

An article provided by BILL HIGH of The National Christian Foundation

Every year at this time the National Christian Foundation will do over 50% of its volume in annual giving. Happily, much of that giving comes from new people—people who didn’t know a solution existed to increase their giving while reducing taxes.



Give Now, Deduct Now, Distribute Later

Often people come to us because they’ve received a big bonus, sold an asset, received an inheritance, or received a chunk of money. They want to give but they aren’t sure where. Solution: they can open a giving fund, and make the gift now into the giving fund to receive the deduction. Then they can give to a charity from their fund later when they have time.



Give Stock Instead of Cash

If you are writing a check for charitable contributions that is above $10,000, chances are you should consider talking to your broker about giving stock instead. A gift of publicly traded stock allows an individual to donate at fair market value and avoid the capital gains tax and it also allows your advisor to rebalance your portfolio. Generally, this approach allows for a 35% increase in giving.


stuffGive Stuff in Addition to Cash
90% of our wealth is in our stuff. If you feel maxed out in your cash giving, the solution may be to give non-cash assets. This can include things like cars, trucks, boats, electronics, collectibles, precious metals, and even artwork. In many cases, we see people increase their giving by using assets they were going to sell or give anyway.



Real Estate Giving Works Toocircle7
It’s often overlooked, but real estate is a great gift: residential houses, commercial lots, farm ground, etc. The best part about giving real estate is that partial gifts are possible too. You can donate at fair market value and avoid capital gains with this kind of gift. Real Estate gifts work best when the value is $50,000 and up with no debt.


Business Sales Represent the Greatest Savingsbusiness_for_sale
Many business owners wait until year-end to complete the sale of their business. The business sale represents the greatest opportunity to maximize giving while minimizing tax. Like publicly traded stock, a portion of the business can be donated prior to the sale at fair market value, and capital gains tax avoided. Even if the sale doesn’t go through, the deduction is still good against ordinary income.


December 31 is a Real Deadlinecalender
The giving season ends December 31. At a minimum, the gift must be received or postmarked by December 31. Each year, we have the procrastinating few who call us wondering if we can backdate the gift. Unfortunately, the answer is no.


picture1Not Everything is About A Deduction
While our focus has been on tax savings, I like to remind people that not everything is about a deduction. I like to encourage random generosity. Have fun with your giving. Need a few ideas on random generosity? Read this post.

Remember the real purpose behind increasing your giving. It’s not just about increasing your charitable deduction, but it’s far more about the impact you can have in people’s lives. And as you impact people’s lives, you experience real joy.

If this post is helpful to you, share it with others and spread the joy of generosity.