10/20/2023
It's Not Too Early to Plan for Year-End Giving
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Kaliff
Matthew A. Kaliff | SPECIAL TO THE CJN
Article reprinted with permission from Cleveland Jewish News
Make the most of your year-end giving with some perennial, and some new, charitable planning tips.
Crisis aid for Israel. There is a tremendous outpouring of support for organizations that help the people of Israel and victims of terror. To ensure your gift is used effectively and to claim a charitable deduction, make sure you give to a known U.S. charity or a U.S. “friends-of” affiliate of an Israeli charity. Contributions to the Jewish Federation of Cleveland’s Israel Emergency Campaign provide immediate assistance through international partners.
Contribute appreciated securities to maximize tax savings. Donating appreciated securities owned for more than one year is far more tax-wise than selling the asset, donating the proceeds, and then paying tax on the gain. This strategy has two advantages. First, you can claim a charitable deduction for the value of the gift. In addition, you can save on capital gains tax that you may otherwise have owed on the value of the gain. Capital gains tax savings are available even if you do not itemize deductions. Charitable organizations require extra time to process contributions of closely held stock, partnership interests, real estate, and other non-cash assets. Act now if you aim to complete such gifts by Dec. 31.
Contribute to a Donor-Advised Fund
If you anticipate making charitable donations over time or to multiple organizations but want to claim a charitable deduction this year, consider a donor advised fund. Your contribution to the donor advised fund is deductible in 2023, but you may recommend charitable distributions from the donor advised fund in 2023 and beyond. Contributions of appreciated assets to a donor advised fund avoid capital gains tax. There is also a convenience factor as the donor advised fund sponsor provides you with a single receipt for each contribution to the donor advised fund and processes charitable distributions to the recipient organizations.
Use the IRA Qualified Charitable Distribution
If you are over 70½ years old, you may make direct transfers of up to $100,000 annually from a traditional IRA to qualified public charities. The qualified charitable distribution amount is not included in your taxable income. If you are over age 72, the distribution may fulfill part or all of your required minimum distribution. Donor-advised funds, private foundations, and supporting organizations are not eligible for the qualified charitable distribution benefit. Contact your IRA custodian about making a charitable distribution benefit.
Support K-12 Scholarships, Get an Ohio Tax Credit
You can receive an Ohio tax credit by contributing to an eligible Ohio scholarship granting organization that supports K-12 education for needy students. The credit is up to $750 for individuals and $1,500 for couples (all Cleveland Jewish day schools are affiliated with Scholarship Granting Organizations). New for 2023, this credit can be claimed for donations made before April 15 of the following year (instead of Dec. 31 of the current tax year). The Ohio Attorney General maintains an online list of scholarship granting organizations. These contributions also qualify for a federal charitable deduction for taxpayers who itemize.
Don’t miss contribution deadlines. You must meet these deadlines if you want your contribution to count for a 2023 deduction. For donations sent by U.S. mail, the postmark must be no later than Dec. 31 and not the date of the check. Gifts sent by UPS and FedEx must arrive by Dec. 31. Credit card contributions are considered as of the date the charge occurs. Stock transfers are dated when the transfer to the charity’s name is complete. Initiate stock gifts well before Dec. 31.
Matthew A. Kaliff is senior director of endowment development at the Jewish Federation of Cleveland in Cleveland. This article is not intended as legal, tax, or financial advice. Consult with your own professional adviser.
