Solutions for Your Client
Professional advisors in the legal, accounting, and financial sectors are often in a position to advise their clients about charitable giving, though few specialize in this area. The chart below provides examples of ways the Community Foundation can assist you and your client in structuring gifts that maximize tax savings, while establishing the enduring community legacy your client desires.
Year-end Tax Planning
Your client just sold his business and would like to make a substantial charitable donation to offset his taxable income, but he has no time before the end of the year to research charities that might be of interest to him.
Establish a donor advised fund and receive an immediate tax deduction for the gift. Your client may subsequently suggest grants to the charities of his choice whenever it’s most convenient. Consolidating his giving through a donor advised fund makes it easy to keep track of charitable gifts for tax reporting.
As a retiree, your client wants to increase the income she and her spouse currently receive from certificates of deposit, but she doesn’t want to risk investing in stocks. She also would like to leave something after her death to benefit the arts and education in her community.
Establish a charitable gift annuity or remainder trust that provides a stream of income to her and/or her spouse during their lifetimes. Any remainder can be used to establish a charitable fund to benefit the charity (ies) that she designates. She receives enhanced current income, while knowing that her charitable objectives will be met in the future.
He owns highly appreciated stock that he’s held for more than one year. He has a strong interest in affordable housing for the disabled and would like to take an active role in supporting his community. He also would like to involve his adult children in establishing a plan for his family’s charitable giving.
Open a donor advised fund with a gift of his appreciated stock. He will receive an immediate charitable tax deduction for the fair market value of the stock and avoid paying capital gains taxes on its sale. His family, including his adult children, can serve as advisors to the fund and develop a charitable mission together, with the assistance of Foundation staff if desired.
Appreciated Real Estate
She owns appreciated real estate and wishes to donate it to her local church, but the church is not prepared to accept gifts of real estate.
Donate her property to establish an endowment fund for the benefit of her church. She will receive a tax deduction for its fair market value, while avoiding any capital gains tax that would arise from a sale. The Foundation will sell the property and use the proceeds to provide ongoing operating support to the church.
He is approaching retirement and wants to reduce future income and estate taxes by directing IRA assets left at the time of his death to charity. He would also like to ensure his gift impacts critical community needs present at the time of his gift.
Contribute his IRA assets to the Community Foundation. Gifts that support the Foundation increase our ability to respond to community needs. By gifting his IRA or qualified retirement plan assets to charity at the time of death, he maintains the use of his assets during his lifetime, generates an estate tax deduction and avoids paying income taxes upon the distribution of plan assets.