Structuring Gifts in Light of the Tax Cuts and Jobs Act

By Kathy Sperlak, Executive Vice President

The Tax Cuts and Jobs Act of 2017 doubled the standard deduction, which will mean fewer taxpayers will be itemizing their deductions for 2018. Many experts believe this will have a significant impact on charitable giving this year. In addition to the options mentioned in other articles in this issue, here are some suggestions for helping your donors structure gifts that will still allow them to make the charitable gifts they would like to make.

Qualified charitable distributions from IRAs

Taxpayers who are age 70½ or older are required to take annual minimum distributions from their IRAs. These withdrawals come with income tax. Many of your donors of this age may wish, instead, to make a direct distribution to your organization (up to $100,000), reducing the amount they would be taxed. For information on communications about the Charitable IRA to share with donors, please click here.

Gifts of appreciated stock

Those who itemize get a double tax benefit from donating appreciated stock owned more than a year. They get a deduction of the full value of the shares and avoid being taxed on the gain. Even those who don’t itemize may benefit from donating appreciated stock instead of cash. For example, someone who normally gives $2,500 each year could contribute shares of stock worth the same amount while not having to pay capital gains tax that would be owed if the shares were sold (15%).

Click here for communications and more information for you to encourage gifts of stock. ■

Kathy Sperlak is Executive Vice President for Sharpe Newkirk.

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