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January 25, 2014

The Best Property to Give to Charity

Giving to charity is not only personally satisfying, the IRS (and possibly your state) also rewards you with generous tax breaks.

  • Current income tax deduction if you itemize, subject to certain percentage limitations for any one year
  • Tax benefit received reduces the cost of the donation (e.g., a $100 donation from someone in a 30 percent tax bracket has a net cost of $70)
  • Reduces or eliminates capital gains tax if appreciated property is given
  • No transfer (gift and estate) taxes imposed
  • Removes any future appreciation of the donated property from your taxable estate

Types of property

Highly appreciated or rapidly appreciating property, such as:

  • Intangible personal and real property (e.g., stock or real estate)
  • Tangible personal property (e.g., art, jewelry)

Cash

  • Easy to give--the type of donation most charities like best
  • Be sure to get a receipt or keep a bank record, regardless of the amount

Income-producing property, such as:

  • Artwork (if given by the artist)
  • Inventory
  • Section 306 stock (stock acquired in a nontaxable corporate transaction)

Tangible personal property, such as:

  • Cars
  • Jewelry
  • Paintings

Remainder interests in property

  • Lets you use the property, or income from the property, until a later date. Gift and estate tax deductions are not allowed unless a trust is used. You may only take the income tax deduction in the year that the gift is actually conveyed.

Note: You may need to have certain types of property appraised.


IMPORTANT DISCLOSURES This information has been prepared by Broadridge Investor Communication Solutions, Inc. Minis & Company (“Minis”) does not endorse the content provided, it is to be viewed for informational purposes only. Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. The information and material presented in this report are for general information only and do not specifically address individual investment objectives, financial situations or the particular needs of any specific person who may receive this report. Investments involve risk and an investor may incur a profit or a loss. Services and products offered through Minis and its affiliates are not insured by the FDIC, not a deposit or obligation of, or guaranteed by, the depository institution and are subject to risks including the possible loss of principal amount invested. Past performance does not guarantee future results. Prices and yields quoted are subject to change. Minis, its affiliates and subsidiaries, or its officers and employees may from time to time acquire, hold or sell securities or other derivatives related to such securities mentioned herein.

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