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Charitable Giving and the Impact on the Financial Plan

 

Show Description:

Jason and Alex kick off the show sharing stories of family and staying safe around the holidays attempting to hold on to the traditions that we all have, while recognizing the current COVID protocols. With this intro, the show segues into the “Season of Giving” a discussion around charitable giving and the benefits associated to reduce your taxable liabilities.

Alex references some charitably inclined billionaires and the strategies that they have implemented to give back to society. Jason interjects that we are the most charitable country on the face of the earth and that even smaller charitable donations can and will add up. With clients, IDA has been creating family foundations that require (per the client’s wishes) a 5% donation every year to a specified non-profit charitable organization. An awesome way for them to save a little bit on tax, but truly a way to be focused on giving for years to come.

There were big changes in 2020 regarding the number of deductions that you can take. The IRS moved the deductible amount to 100% of your Adjusted Gross Income (AGI), up from 60%.  In addition, there is discussion around the $300 dollar “above the line” deduction if you choose the standard deductions on your tax return. Alex adds that these adjustments were, in his opinion, a smart foresight by the legislators to recognize that this year will be an incredibly difficult year for non-profit organizations given the business closures and loss of income by many.

Alex asks, what can individuals do to participate in charitable giving? Jason responds, that if you are donating to a qualified 501c3 charitable organization, you are participating and will receive the tax deduction. Jason also interjects, that he is a proponent of letting people decide what to do with their money rather than imposing higher taxes. By keeping taxes low and incentivize giving, you will better help the poor and less fortunate. Jason shares his experiences of being a board member of The Boys and Girls Club and the programs the organization has been able to provide. Alex adds his experience from this year’s Boys and Girls Club Gala and the amount of generosity given. Jason closes by saying that if people are left to their own devices, many will be inclined to give.

Jason and Alex recap the topics covered, creating a Family Foundation, additional deductions offered in 2020, and individual 501c3 charitable giving. Jason elaborates on how wonderful and rewarding a family foundation can be if set up correctly.  Jason closes the show discussing the benefits of donating highly appreciated stock. Gifting a highly appreciated asset to a qualified charitable organization will remove the tax liability on appreciation and allow the recipient to sell the asset with no capital gain tax. Alex adds that this can also be an available benefit when taking required minimum distributions (RMD). Jason reminds the listeners that this is a great time to get with a professional adviser and incorporate a charitable aspect into your financial plan. Which may be the most rewarding legacy you can leave.

In this show you will learn about:

– Family Foundations

– Charitable Giving 2020 Enhancements

– Individual 501c3 Charitable Giving

– Gifting Highly Appreciated Assets

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