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Tax efficient charitable giving

Everyone enjoys giving to different charities in of course the most tax efficient manner possible. Now the question to ask would be, what exactly does that mean, and is it possible for you to do it? One of the key ideas is that tax strategies are certain implementation decisions. Tax strategies sort of low blow or hide the cost of donations that you may have already chosen to make based on your personal values and goals. Now for tax efficient charitable giving, you need to consider one or maybe a few more of these simple but standard tax planning implementation strategies.

The first would be that by donating appreciated securities instead of cash you are able to avoid thing like the capital gains taxes that could possibly otherwise be due on those securities. For certain tax purposes, you will be getting the full market value of these securities, which are appreciated, as a possible loss or deduction from income taxes and also you are able to fully avoid the capital gains tax liability. The charity would capture the complete market value of the so called gift by selling the securities on receipt and, not being responsible for any capital gains tax liability. This strategy is helpful for when you want to lessen the appreciated securities which are found in your portfolio without even having to deal with the capital gains. Another good strategy would be donating to a chosen donor advised trust. By doing this, you will be able to separate the charitable gift decisions from your tax planning. Once you donate cash or things like appreciated securities, to a given account held at a certain charity that would function like some sort of escrow account which is mainly for your charitable gifts or even a brokerage firm. Yes you are going to get the potential charitable deduction and this will happen in the year the wealth was donated to the donor advised trust and then can in turn advise the fund to disperse the gifts to the different charities which is o course your choice and at your preferred time or pace.


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