strategy

Have you considered charitable giving as a tax planning strategy for 2014?

It’s that time of year again! As we enter into the holiday season (which based on the local Target store is now officially the day after Halloween) of festive parties, family gatherings, and of course,  gift giving, it creates a natural opportunity for those who are charitably inclined to consider yearend charitable contributions.  In addition to the philanthropic aspect of charitable giving, it also can be used as an effective  estate and yearend tax planning tool.

Most American households make their charitable gifts in cash, with the corresponding tax deduction allowed as an itemized deduction on their individual tax returns. In most instances, taxpayers may deduct up to 50% of their adjusted gross income (AGI) for cash gifts made to public charities.  For gifts that exceed the 50% threshold, the contribution deduction is carried forward for a five year period.

For those who plan on incorporating charitable giving into their estate and tax planning strategies, gifting of highly appreciated property (stock, mutual funds, real estate) can be an extremely valuable tool that is often overlooked. This tax planning strategy is derived from the general idea […]