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Financial Planning
December 4, 2020
‘Tis the Season…for Charitable Giving
By Lisa James & Lori Zager
The stock market has been a remarkable bright spot this year, but as 2020 draws to a close, millions of Americans remain unemployed. Others have lost their businesses or suffered a drastic drop in income. We devote this blog to ways of helping those who have been left behind.

Ways to Give
  • A cash donation of up to $300: Even if you don’t itemize, donations this size can be deducted for the 2020 tax year.
  • Giving from your IRA: Up to $100,000 of donations made directly from your IRA are not taxed, unlike normal distributions which are taxed as ordinary income. This tax break benefits both itemizers and non-itemizers (over 59 ½) and owners of inherited IRAs. IRA withdrawals for charitable contributions also satisfy your minimum distribution requirements.
  • Donating appreciated stock:
    • Itemizers receive a charitable deduction for the full fair-market-value of the stock at the time of the gift AND avoid paying the capital gains taxes on the stock. Stock must be held over 1 year to qualify.
    • Non-itemizers can get a step up in cost basis by donating their appreciated stock and using available cash to repurchase the same shares at current prices.
  • Bunching several years of charitable gifts into one year: A higher donation amount could mean you will benefit from itemizing your 2020 tax return and save taxes on your contributions.
For Larger Gifts
  • Consider a donor-advised fund (DAF) – a private philanthropy fund administered by a third party. A DAF is like a charitable investment account set up for the sole purpose of supporting organizations that matter to you.
  • A DAF is particularly useful in a high-income year to maximize the value of the charitable tax deduction. Using a DAF allows you to donate assets and take a tax deduction today even though the funds don’t need to be distributed to charity until sometime in the future.
    • Minimum starting donation amounts typically range from $5,000 to $25,000
    • The donation is irrevocable.
    • The contributions are invested tax free.
    • The donor can typically decide how to invest and distribute the funds over time.
  • There are many types of fund sponsors to choose from, all with different goals and minimums.
    • National donor advised fund organizations – such as Schwab, Fidelity, Vanguard, American Endowment Foundation, National Philanthropic Trust
    • Community foundations – which focus on local causes, such as Marin Community Fund
    • Public foundations – which typically support national and international charities focused on a particular issue or geographic region
To deduct any contribution in 2020, the charity or DAF must receive the donation by December 31st, so the earlier you start the process, the better.

We wish you and your families health, happiness, and the joys of giving in the coming holiday season!

The content provided herein is for informational purposes only, and should not be considered advice that is specific to your personal circumstances. Nothing contained herein is intended to be a formal research report, or as a source of any specific investment recommendations and makes no implied or express recommendations concerning the manner in which any accounts should be handled.The information contained herein is not intended to be comprehensive, and there may be other factors and questions relevant to your own individual situation. Any opinions expressed in this material are only current opinions and while the information contained is believed to be reliable there is no representation that it is accurate or complete and it should not be relied upon as such. Investing involves risk, including loss of principal, and no assurance can be given that a specific investment objective will be achieved. You should consult a professional legal and tax advisor for any tax and estate planning advice prior to taking action.

2X Wealth Group is a team at Ingalls & Snyder, LLC., 1325 Avenue of the Americas, New York, NY 10019-6066  |  (212) 269-7757

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The views and opinions expressed in the posts on this page are those of the author and do not necessarily reflect the position or views of Ingalls & Snyder, LLC.  Certain content on this page were originally  posted in a personal blog maintained and operated independently by the author prior to joining Ingalls & Snyder, LLC. 

The content provided herein is for informational purposes only. The statements are believed to be accurate at the time of writing, but tax laws may change. The statements provided do not contemplate each individuals unique financial circumstances. Therefore, you should consult a professional legal and tax advisor for your estate planning needs before taking action.