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.