Strategic charitable giving options to consider as you prepare for the year ahead
As tax season approaches, now is an ideal time to review charitable giving strategies that can benefit both your financial planning and the causes you care about. The Community Foundation offers several options that may align with your philanthropic and tax planning goals.
Qualified Charitable Distributions (QCDs)
If you missed the 2024 QCD deadline, first ensure you've met your Required Minimum Distribution (RMD) obligations for the past year. Now is the perfect time to plan your 2025 QCDs strategically.
QCDs remain an excellent option for donors aged 70½ and above to contribute directly from IRAs to designated, field of interest, scholarships, or community funds. Remember that donor advised funds are not eligible recipients for QCDs.
Early-year execution helps you avoid complications with the "first-dollars-out rule" and ensures completion well before the December 31 deadline.
Business Succession Considerations
If you're contemplating exit strategies for a closely held business, consider consulting with the Community Foundation about gifts of closely held stock. This approach can be a valuable component of your succession planning, as gifted shares avoid capital gains tax upon eventual sale.
The proceeds then support your charitable priorities through your fund at the Community Foundation. Timing is crucial—existing sale negotiations may affect charitable deduction eligibility, so planning early is essential.
Appreciated Stock Opportunities
If your investment portfolio showed significant gains last year, consider making early-year gifts of appreciated stock to a fund at The Community Foundation. Current high positions may present ideal opportunities to maximize your charitable impact while securing tax advantages.
Remember that stock gifts to public charities qualify for fair market value deduction at transfer, and subsequent sales incur no capital gains tax, making this a win-win for both your tax situation and your charitable goals.
For more information about these or other charitable giving strategies, please contact our Philanthropic Services team at kurstyn.loeffler@toledocf.org.