In the coming months, donors will confront the tax consequences of last year’s revised tax law. Those who did not plan well, or at all, may be in for some unwelcome surprises. You can help these donors navigate their new reality. Gifts of appreciated property, the charitable IRA rollover, and bunching gifts to charity continue to be tax-smart options that will have more significance for donors after they experience the effect of the new law on their own taxes.

  • Make gifts of appreciated property such as publicly-traded securities to charity. 
    Donors can make gifts of appreciated assets they have owned for at least one year without triggering capital gain tax. If donors itemize their deductions, they will get the double tax benefit of an income tax charitable deduction based on the full value of the appreciated assets in addition to complete capital gain tax avoidance. 
  • The charitable IRA rollover is a tax-smart gift option. 
    If donors are over 70½, they can make a direct transfer from a traditional IRA or Roth IRA to charity of up to $100,000. Donors will avoid all income tax on the withdrawal, even if they don’t itemize. 
  • Bunch gifts to charity. 
    Donors total deductions may put them close to the threshold where itemizing deductions offers greater tax benefits than taking the standard deduction. In this case, a donor might consider making a larger charitable gift this year, forgoing a gift next year, so that she can enjoy the additional tax savings that itemizing would offer. 

We can help you include concrete ways to address the tax consequences of the revised tax law by explaining and promoting these gifts in your marketing communications throughout the coming year. It’s a win-win for both the donor and the organization. We can highlight these tax-smart options to your donors in various ways, just let us know!