It’s the season of charitable giving, and Pasadena Community Foundation has three ways you can maximize support for the causes you care about while also taking advantage of important tax benefits. Writing a check or giving via credit card is quick and easy, but there are tremendous tax benefits when you make gifts in other ways!
Using appreciated assets like stocks are a great way to give directly to a charity. In doing so, you may not need to pay capital gains taxes on the stock’s appreciation, effectively increasing your donation and decreasing your tax exposure. A simple strategy for boosting your donation—and your tax deduction—is to give stocks, bonds, or other appreciated securities directly to your charity of choice.
Donor Advised Funds
A donor advised fund, or DAF, is a giving vehicle sponsored by a public charity that allows you as the donor to make a charitable contribution (including appreciated securities and real estate), receive an immediate tax deduction, and then recommend charitable grants from your fund over time. They can be expendable, invested, or endowed depending on your needs and your giving goals. Learn more.
Qualified Charitable Distribution
Another strategy that can reduce your taxable income is a qualified charitable distribution, or QCD. These are donations made directly from your IRA to your chosen charity. While the gift amount won’t qualify for a charitable deduction, it won’t be considered taxable income either. This effectively deducts the amount transferred to charity from your taxable income, even if you would not otherwise be itemizing deductions. QCDs count toward satisfying your required minimum distribution (RMD) for the year if it has not already been met. To benefit from this strategy, you need to meet a few strict requirements, so make sure you talk to your advisor or accountant first. Learn more.
Liz Algermissen, PCF’s Director of Development, can answer your questions about smart giving and assist you in making a donation to PCF.
Reach out today!
(626) 796-2097 ext. 10.