Carissa Giebel column: Season for giving offers life lessons
7:49 PM, Dec 24, 2012 | Written by Carissa Giebel
’Tis the season to think about giving. Quite often, more joy comes from giving gifts than it does from receiving gifts. It can be such a blessing to share with those in need, especially at Christmas time. There are many children and families that go without and we can be such a blessing to them by helping them out during this time of the year.
Perhaps you have everything you need and you don’t want others to spend money on stuff you don’t need that will likely just sit around. Instead, ask for a gift to a favorite local charity in your name. This is a great way to teach children the value of giving to the less fortunate. Perhaps next year, instead of doing a gift exchange, choose charities to gift to, rather than each other.
Many charitable organizations are looking for year-end donations to cover any shortfalls they may have had during the year. As a taxpayer, this can be advantageous to give now before the end of the year. As long as a check has been postmarked or a charge is made to your credit card before the end of the year, it will be deductible in 2012. It doesn’t matter if the check isn’t cashed or the credit card bill isn’t paid until 2013.
Gifting of certain assets can provide greater tax savings than others. For example, any stocks or bonds that may have appreciated over time are always an asset to consider donating, especially if you think they might decrease in value in the near future. If appreciated publically traded securities are owned by a donor for at least one year and then given to a charity, the donor can deduct the full fair market value as a charitable deduction. When the charity sells, neither the donor nor the charity has to pay any capital gains tax on the appreciation. The same applies to real estate owned by the donor for at least one year.
Charitable planning can also be a part of your estate plan. If you haven’t taken the time to put together a comprehensive estate plan or you haven’t reviewed your plan in a few years, make it your New Year’s resolution to do so.
If you’re considering leaving assets to charity through your estate plan, retirement accounts are often the asset of choice. Retirement assets left directly to charity are not subject to income taxes or estate taxes. Non-charity beneficiaries are stuck paying the deferred income taxes on retirement assets, whereas charities do not.
It’s important to understand that the type of asset given and when it’s given can have a significant effect on tax savings and other potential planning benefits. If you are considering making a charitable gift or leaving something to charity at death, consult with a professional to help you determine what makes the most sense for you.
Carissa Giebel is an estate planning attorney and partner at Legacy Law Group LLC. She can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it., www.legacylawllc.com or (920) 560-4651.
