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The 700 Club

Your Guide to Year-End Giving

Charitable IRA Rollover (QCD)

The most tax-efficient way for senior donors over 70-1/2 years of age to give is the Charitable IRA. It is a transfer by check from your existing IRA mailed directly to the qualified charity. It counts towards your Required Minimum Distribution (RMD) and is reported on the Federal 1040 as a Qualified Charitable Distribution (QCD). This means it is a tax income exclusion reducing Adjusted Gross Income (AGI) up to $100,000. By lowering AGI it potentially can reduce the tax on social security benefits besides lowering future Medicare premiums.  This tax benefit is a great choice for donors that do not itemize and take the standard deduction instead. RMD’s must be taken before December 31 to avoid a significant IRA penalty of 50%.

Donor-Advised Fund (DAF) is like a charitable investment giving account that can be easily set-up through firms such as The National Christian Foundation (NCF), Fidelity, Vanguard, Schwab, etc. Upon funding the DAF, donors are eligible for an immediate tax deduction. The DAF can be funded with cash (up to 60% of AGI-Adjusted Gross Income), real estate or other business interests (up to 30% of AGI). The investment grows tax-free until it is granted out in future years to the donor's favorite IRS qualified public charity. It is a great choice for those taxpayers expecting a high-income tax year. Donors can also name a charity as beneficiary of the DAF when setting up the account.

Donating stock shares are still a good way to give at year-end. Only itemizers will realize the full tax benefit of donating stock (deduction of market value and bypass capital gains tax). Non-itemizers can still avoid the capital gains tax. For almost all stock donations, it is a simple and reasonably short process via wire transfer (1 to 3 days) from the donor’s brokerage account to the charity’s brokerage account. But don’t wait until late in December as your broker may not guarantee the transfer being completed by December 31.

Supplement retirement income with a Charitable Gift Annuity. You receive fixed payments for life for you and/or your spouse. Rates are higher than CD's or low earning money market investments. Also, you receive a charitable itemized tax deduction and the annual income payments to you are partially tax-free.

Another strategy is "bunching" charitable donations or medical expenses in 2019 if it helps you to deduct more income.

LEGACY GIVING

Beneficiary designations are simple to give and easy to arrange. Assets can be designated all or in part on your retirement plan, insurance policy, bank account or brokerage account. When doing your estate planning, you can make a legacy gift through your will or living trust and designate a specific amount or percentage of the remainder of the estate. For Legacy gifts to CBN, you qualify to become part of CBN's new Lasting Legacy Society

The tax information provided is general and educational in nature and should not be construed as legal or tax advice.

CBN does not provide legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation related to your charitable planning. 

 

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Guest Info

Guests
Credits

CBN Executive Director, Planned Giving

Chartered Advisor in Philanthropy

Chartered Financial Consultant

Retirement Income Certified Professional 

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