WHAT TO DO IN ORDER TO ENSURE YOU CAN CLAIM A CHARITABLE DEDUCTION FOR 2019:
o For donations of cash (including checks), your donation must be either postmarked or personally delivered to the not-for-profit organization on or before December 31.
o For donations of stock, your stock must be transferred out of your account on or before December 31.
o For donations via credit card, your credit card donation must be processed on or before December 31.
o Note, if you are 70 ½ or older you can distribute up to $100,000 from your IRA/401K/403B directly to a charity, tax–free (note: this does not apply to donor-advised funds or split-interest gifts).
DONATING LONG-TERM APPRECIATED SECURITIES CAN PROVIDE ADDITIONAL TAX BENEFITS
o When you donate long-term appreciated securities, you can claim a charitable income tax deduction for the fair market value of the securities on the date of transfer, no matter what you originally paid for them.
o You pay no capital gains tax on the transfer
For example, if the securities originally cost $2,000 and now have a fair market value of $10,000, you do not pay tax on the $8,000 gain and you may claim a charitable income tax deduction for the full $10,000.
DONATING CASH VS. STOCK
In this example, you see that donating the stock results in no capital gains tax being paid, a larger itemized deduction, and more money for the charity of your choice.
Above example assumes 35% tax bracket, a cost basis of $2,000, that the investment has been held for more than a year, and that all realized gains are subject to a 20% long-term capital gains tax rate. This does not take into account any state or local taxes.
Note: Certain federal income tax deductions, including the charitable contribution, are available only to taxpayers who itemize deductions, and may be subject to reduction for taxpayers with AGI above certain levels. Deductions for contributions of appreciated property generally are limited to 30% of the donor’s AGI, however, excess contributions may be carried forward for up to five years. If you hold securities with a loss, it is usually better to sell first. By doing so, you can take the capital loss for tax purposes and then donate the cash. In most cases, donating appreciated securities can be a cost-effective way to benefit the charities of your choice. Please consult with your professional advisor to determine your specific situation. For more information contact Lisa Stanger, Jewish Foundation Executive Director, email@example.com, 203-387-2424, ext.382. or visit us at www.newhavenjewishfoundation.org or www.jewishlegacynewhaven.org