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Alternatives for Year-End Giving

Maximize your tax situation while supporting the charities that are most meaningful to you.

As we near the end of 2022, many of us are thinking about gratitude and the values that are important to us and our families. It’s possible to make a difference to your favorite charity while also improving your financial situation. To help make the most of your philanthropic support, consider these strategies:

Donation of Appreciated Assets
Gifts of securities or other assets that have increased in value may avoid capital gains income that would otherwise be taxable. However, you can still get full deductibility of the market value of the assets you donate. Depending on the type of assets and any appraisals you might need, you will want to initiate the process soon.
Qualified Charitable Distributions (QCD) from IRAs
If you are over 70 ½, you can make distributions directly from your IRA to an operating 501(c)(3) charity and not have it count as taxable income to you. Not only may this make your standard deduction more valuable, but it can provide other tax benefits based on your Adjusted Gross Income.
Bunching Gifts
If you expect higher taxable income this year or typically only take the standard deduction on your tax return, bunching multiple years’ worth of gifts into a single calendar year may lessen your tax burden and provide more for the charities you support. Used in conjunction with vehicles such as a Donor Advised Fund, you may still allocate the gifts to charities on an annual basis.

These are just a few potential gifting strategies that may benefit both you and the organizations you support. We encourage you to review all possible solutions with your Estate Planner or Financial Advisor. Charities will need to provide a contemporary acknowledgement of the gift and that letter needs to be retained to claim a charitable tax deduction.

Baird Trust offers a range of charitable solutions including private foundation management, split-interest charitable trusts, and non-profit investment management. For more information, contact your Baird Financial Advisor or Trust Officer.