019 // Generosity and Deductible Giving - Part 3

Sam and Wealthquest President David Kern continue their insightful dialogue on giving and generosity in this episode. They delve into tax-deductible methods of giving, highlighting the benefits of donating appreciated shares to avoid capital gains taxes. The conversation also explores the types of shares that may not be ideal for donation. 

Furthermore, they discuss the advantages of donor-advised funds, combining charitable giving with effective tax strategies. This episode emphasizes the importance of integrating generosity with a comprehensive financial plan, ensuring flexibility and tax benefits in your philanthropic efforts.

Episode Highlights: 

[02:55] We're now shifting gears to gifting to nonprofits or charities. This would be any 5013c that doesn't pay income tax.

[03:11] You can be charitable and benefit these organizations and get a tax benefit in the process. 

[03:26] Gifting shares or assets to charities. If you sell a stock that has increased in value, you'll have to pay income tax on it. If you gift that stock to a charity, neither of you pay taxes on it.

[04:00] You can also record this on your Schedule A to see if it works for you this tax year.

[05:08] You don't want to donate shares that have lost value. You want to donate shares with the lowest cost basis or the greatest amount of appreciation.

[06:27] Think of a donor-advised fund like a holding pen for charitable donors. This fund can also receive appreciated securities.

[09:53] Bunching is two years worth of giving in one year. 

[12:27] Qualified charitable distributions or QCDs. Required minimum distributions RMDs. 

[14:19] If you're already charitably inclined and you're going to give a certain amount, use a QCD instead of paying taxes on your required minimum distributions.

[17:25] You can also make charities the beneficiaries of your accounts. If you leave an IRA to a charity, they won't have to pay taxes on that. 

[18:47] Bonus: Specific to Ohio. Scholarship granting organization SGO is a new Ohio based tax scholarship program. It receives contributions from donors and grants scholarships to eligible students.

[20:11] Giving to an SGO will reduce state tax liability.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.

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