Charitable Giving Options
As you discern whether or how much to contribute to the Fix-It Campaign, please consider the tax advantaged methods, under existing tax law, for making charitable contributions with appreciated property or through your Individual Retirement Account (IRA) highlighted below. For more information on how to complete these transactions, please contact Laura Angelini, Business Manager, at (847) 726-4747 or firstname.lastname@example.org.
Long-term capital gain property
You can usually deduct the full fair market value of appreciated long-term assets you've held for more than one year, such as stocks, bonds, real estate, or mutual funds. For example, the full fair market value of publicly traded securities is the average of the high-low price on the date of transfer. What's more, there's no capital gains tax.
A wrinkle here is that the deduction is limited to 30% of your adjusted gross income (AGI) instead of the usual 50% limit for donations of cash and short-term property made to public charities - though you can still carry forward unused deductions for five years.
If you choose to deduct your cost basis only, you can raise the limit to 50% of your AGI. But if you're holding securities with a loss, it's better to sell first, take the capital loss for tax purposes, and then donate the cash. Keep in mind, in most cases, donating appreciated securities can be a cost-effective way to benefit the Fix-It Campaign.
Tax Break for IRA Owners
An IRA owner who is age 70.5 or over can directly transfer, tax-free, up to $100,000 per year to an eligible charitable organization. Eligible IRA owners can take advantage of this provision regardless of whether they itemize their deductions. Distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans, are not eligible.
To qualify, the funds must be contributed directly by the IRA trustee to St. Francis de Sales Parish. These amounts are not taxable and no deduction is available for the amount given to the charity.
Transferred amounts are counted in determining whether the owner has met the IRA's required minimum distribution rules.
For more information about these options, or for clarification or follow-up, please contact Doug Samz, CPA, member of the Parish Finance Council, at (847) 644-9277.
NOTE: The information provided here is general and educational in nature. It is not intended to be, nor should it be construed as, legal or tax advice. St. Francis de Sales does not provide legal or tax advice. St. Francis de Sales strongly encourages you to consult with your tax advisor or attorney before making charitable contributions.