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Non-Cash Assets & Charitable Giving

Did you know that according to IRS statistics, 75% of the charitable giving in our country comes from cash assets (money in our bank accounts) but 90% of this country’s wealth is held in non-cash assets?  What is a non-cash asset?  Examples are real estate, retirement plans, investment holdings, life insurance, farms, and business interests.  What opportunities might we be missing by not utilizing more of these non-cash assets to support the organizations and causes that are important to us?

For those of you who love to give, I’d like to share a few strategies that may enable you to multiply your giving using these non-cash assets.  Please note that any of these strategies should be discussed with your CPA and/or attorney to fully understand any tax or legal ramifications.

  • Qualified Charitable Distributions
    If are over age 70 ½, the IRS allows you to gift money (up to $100,000 per year) directly from your IRA to a charity without reporting the distribution as taxable income.  This is particularly useful if you are no longer able to itemize deductions on your tax return.
  • Donating appreciated investments
    While 2022 was a rough year in the markets, many people have investments (stocks, mutual funds, exchange-traded funds) that still have significant capital gains from prior years.  By donating such an investment directly to charity, you can avoid paying that capital gains tax and may be able to deduct the gift on your tax return, and the charity doesn’t have to pay tax either!
  • Naming a charity as an IRA beneficiary
    When you leave an IRA to your children, they are subject to federal income tax on the amount they inherit from you.  They are also subject to inheritance tax if you live in Pennsylvania.  Both taxes are avoided for any portion of your IRA (or other retirement account) that is left to charity.  This can also work for life insurance or other types of accounts, but it is especially useful for tax-deferred retirement accounts.
  • Gifting business interests
    If you own a closely held business, LLC, or S-corporation, did you know that you can gift all or a portion of your business to charity with substantial tax benefits, even if you want to continue to operate the business?  This requires a bit more planning but can be a great way to make an eternal impact!

I hope you will consider with me how we can steward ALL the resources God has entrusted to us to give generously to our community! These ideas are just the tip of the iceberg, but if you have questions about any of these concepts, you can contact Jamie French at Advent Partners (jamie@adventpartnersfp.com or 717-525-9535).

This explanation is provided for informational purposes only and is not to be construed as or considered to be legal or tax advice.  You should always consult your tax advisor with any and all questions regarding any all tax and tax related matters, including any questions that you may have concerning tax strategies described generally above. Advisory Persons of Thrivent provide advisory services under a “doing business as” name or may have their own legal business entities. However, advisory services are engaged exclusively through Thrivent Advisor Network, LLC, a registered investment adviser.  Advent Partners and Thrivent Advisor Network, LLC are not affiliated companies. Information in this message is for the intended recipient[s] only. Please visit our website www.adventpartnersfp.com for important disclosures.