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Tax Tips for Charitable Donors

Consider these tips for tax-smart philanthropy:

Reduce Taxes Now and Later
The government provides incentives for charitable giving: Take advantage of them. Make charitable donations while you're alive and receive a current income-tax deduction within IRS rules. Because you've removed assets from your taxable estate, you may also lower your heirs' potential estate taxes.

Donate Appreciated Assets
While most charities gladly accept cash gifts, it may be to your advantage to donate appreciated assets. When you give highly appreciated, long-term assets such as stocks or real estate, you receive an income-tax deduction based on the current value of the asset, and you avoid paying capital gains taxes.

Leave a Charitable Legacy
Include charitable gifts in your estate plan and you'll reap considerable (and personal) benefits. When you establish a charitable remainder trust or charitable gift annuity, you may be able to take a current income-tax deduction, establish a lifetime income for yourself or a loved one and reduce the size of your taxable estate. Plus, you'll leave behind a lasting charitable legacy. Contact the Foundation to learn more about planned giving.

Donate Your Retirement Plan
If you're thinking about leaving a charitable legacy, earmark the assets in your pension or retirement plan. While most of the property you leave your heirs is free of income tax, your retirement plan is not (unless your spouse inherits it). Make a charitable bequest with your taxable retirement plan and leave non-taxable assets to your family.