Maximize Your Donation

Options for donating

Are you philanthropic? Do you give to your church, a hospital, school or another organization that is operated for charitable purposes? Here are a couple of ways your kindness can benefit both you and your charity of choice.

• Low basis stock – If you have low cost basis investments, give the investment (or part of it) to a charity. The charity doesn’t pay taxes on the gain of the investment and neither do you. In addition, if you itemize your tax deductions, this may count as a tax deduction. However, be sure to give the investment itself to the charity instead of selling it first then giving the cash to the charity.

• Required minimum distributions – Are you of the age required to take a distribution out of your retirement account? If so, you can have your retirement account pay the charity directly and you will not need to count the amount of the distribution as income for the year. Again, be sure that the retirement account pays the charity directly and that the distribution never touches your account.

These are two ways to give that are more tax friendly than giving cash directly. However, keep in mind there are limitations on how much can be deducted from your taxes but you may also be able to carry it forward.

Be sure to talk to a tax professional or financial planner before finalizing the donation to see if the situation is right for you!