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Strategy for the holidays

First of all, you need to consider donating complex assets. These donors may also contribute complex assets for things such as private company stock, restricted stock, real estate, alternative investments, or other personal property which are directly to charity. The process is something that requires more time and effort than the gifting of cash or publicly traded securities, but it may have distinct advantages as well for your knowledge. Mostly for more on donating complex assets, it is important to keep in mind that Strategic giving would entail thinking beyond cash donations.

These types of assets are what would often have a relatively low cost basis. In fact, for entrepreneurs who may have founded their own companies, the cost basis of their private C corp or S corp stock may be zero. In most cases where these assets have been held for maybe around at least a year, the outright sale of the asset would result in a large capital gains tax for the owner. If, however, the asset would be donated directly to a charity and the charity would then have to sell the asset, the original owner is in many cases able to eliminate capital gains taxes which would then be on the sale of the assets, while potentially receiving a charitable donation deduction as well.

Contributing these complex, non publicly traded assets to charity are things which would involve additional laws and regulations, so usually investors should consult their legal adviser, tax adviser, or financial adviser. Also, ypu should know that not all charities have the administrative resources to accept and liquidate such assets. But many public charities which usually have donor advised fund programs, like one called Fidelity Charitable, are able to accept these assets and can also be able to work with advisers, providing guidance throughout the process. When thinking more on donor-advised funds, you should ponder on Getting Serious about Your Giving?

Once again, you must remember that before undertaking any of these giving strategies, you should consult your legal adviser, tax adviser, or financial adviser since they would usually know best. But, properly employed, each of the strategies represents a tax advantaged way for you to give more to your favorite charitable organizations and causes as well.

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