Tax Efficient Giving

Tax-Efficient Giving

There are several tax-efficient ways to give to Friends of Guéoul: 

Gift of appreciated stock.

A donor may contribute appreciated property to charity. If the asset has been held for 1 year or more the donor will receive a deduction for the fair market value.  The donor also avoids capital gains on the appreciation. 

Contact the charity for the account information to transfer the stock.

Donor Advised Fund.
A donor advised fund is set up with a financial institution.  The donor transfers appreciated assets to the fund and gets an immediate tax deduction.  The donor, in later years, will specify which charity is to receive the funds. The benefit is to get a larger deduction in a year that makes sense for the donor.

Gift from an Individual Retirement Account.
If the donor is over 70 ½, the donor may make a contribution from a IRA or other retirement account and satisfy the required minimum distribution. This avoids the inclusion of the retirement income on the donor’s return.

Legacy Gifts.

  • A donor may leave a bequest in a will as either a percentage of an estate or a specific amount. This will give the estate a charitable deduction if the estate is subject to estate tax. There may be a small legal fee to draft a codicil to an existing will.
  • A donor may designate a charity as a beneficiary on a retirement account, or annuity. This can be done as a percentage or dollar amount.  The distribution will go to the charity upon the owner’s death.  This is a very cost-effective and easy way to remember a charity. The heirs of the estate will not be taxed on this portion of the estate.
  • A donor may specify a POD (Payable on Death) to a charity on a bank account, CD, investment account or other asset. This will avoid probate and reduce the size of the estate if it is subject to estate tax.

Please remember that tax rules are complex.  Any decisions should be made under the advice of your tax advisor and perhaps, estate attorney.

How 2025 Legislation Impacts Your Giving

Smart Giving in 2025

Tax-Advantaged Ways to Support Friends of Guéoul

Please Contact Your Tax Advisor to Analyze Your Situation

Thank you for your commitment to educating girls, lifting families, and bettering our world. This guide explains how recent tax law changes and strategic giving options can help you maximize both your impact and your tax benefits.

Why 2025 Is a Strategic Year for Giving
The One Big Beautiful Bill Act, signed into law on July 4, 2025, makes this an especially important year for charitable giving. Starting in 2026, new restrictions will reduce tax benefits for many donors.

Key Changes Taking Effect in 2026:

  • New 0.5% Floor: Only charitable contributions above 0.5% of your adjusted gross income will be deductible for itemizers
    35% Cap: High-income taxpayers in the 37% bracket will see deductions capped at 35%
  • Good News for Non-Itemizers: Starting in 2026, non-itemizers can deduct up to $1,000 (single) or $2,000 (married filing jointly) for cash donations
  • What This Means: Consider accelerating your 2026 and 2027 giving into 2025 to take advantage of more favorable tax treatment before these restrictions take effect. Or make donations after December 31, 2025 if you don’t itemize.

Donor Advised Funds: Give Now, Decide Later
A Donor Advised Fund (DAF) allows you to make a larger charitable contribution now, receive an immediate tax deduction under 2025’s more favorable rules, and then recommend grants to Friends of Guéoul and other charities over time.

How It Works:

  • You contribute cash or appreciated assets to a DAF in 2025
  • You receive an immediate tax deduction for the full amount and avoid capital gains on the income the asset would generate if sold
  • The fund can grow tax-free through investments
  • You recommend grants to qualified charities like Friends of Guéoul whenever you choose
     

 Why Consider a DAF:

  •  “Bunching” Strategy: Combine multiple years of giving into 2025 to exceed the new 0.5% AGI floor and maximize deductions
    Simplicity: One tax deduction now, but you can support multiple charities over many years
  • Flexibility: No deadline to distribute the funds – take your time to decide which organizations to support
  • Asset Donations: You can contribute appreciated stocks or other assets, avoiding capital gains tax

IRA Charitable Giving: A Tax-Smart Option for Age 70½+
If you’re 70½ or older, a Qualified Charitable Distribution (QCD) from your IRA offers unique tax advantages that aren’t affected by the 2026 changes.

What Is a QCD?
A QCD allows you to transfer up to $108,000 per year directly from your IRA to a qualified charity like Friends of Guéoul. The distribution is not included in your taxable income and counts toward your Required Minimum Distribution (RMD).

Key Benefits:

  • Avoid Taxable Income: The distribution is excluded from your adjusted gross income, potentially keeping you in a lower tax bracket
  • Satisfy RMD Requirements: The QCD counts toward your required distribution
  • Reduce Medicare Premiums: Lower AGI may help you avoid higher Medicare Part B and D premiums
  • Minimize Social Security Taxes: Lower AGI can reduce taxes on Social Security benefits
  • Unaffected by New Rules: QCDs bypass the 0.5% AGI floor and 35% deduction cap that take effect in 2026

Important Details:

  • Age Requirement: You must be 70½ or older
  • 2025 Limit: $108,000 per individual ($216,000 for married couples with separate IRAs)
  • Direct Transfer: Payment must go directly from your IRA to the charity
  • December 31 Deadline: Must be completed by year-end to count for 2025
  • No Additional Deduction: You cannot also claim a charitable deduction for the QCD amount

Your support provides not just scholarships, but supplemental education through our Noos Club, computer classroom access, and ESL teacher training—creating pathways to university and beyond. Whether through a year-end gift, a donor advised fund, or an IRA charitable distribution, your generosity transforms lives and communities.