Charitable Planning

Charitable Planning

Clients may choose to include charitable planning in their overall plan design as charitable contributions will almost always reduce personal income taxes. Thus, the higher your tax bracket, the lower the after-tax cost of a charitable contribution. As a result, you may find that you can contribute more on an annual basis than you originally thought.

For tax purposes, the IRS defines charitable gifts as complete and irrevocable transfers of money, property or other assets to IRS-recognized charities. In order to receive tax-saving benefits from giving to charitable causes, your gift must be completed – generally with no strings attached – and irrevocable (it cannot be reversed or withdrawn) to an IRS-recognized charity.

There are IRS financial incentives involved in giving to charitable causes:

  • Give gifts without paying gift taxes on the gifts;
  • Receive a federal income tax deduction for your charitable lifetime gifts, if you itemize charitable deductions on your tax return and keep receipts;
  • Receive a federal estate tax deduction after death if you’ve made charitable gifts to IRS recognized charities through your will, trust or beneficiary designations;
  • The sale of some of your assets may result in valuable capital gains tax treatment; and
  • It is possible to reduce or eliminate capital gains tax on assets gifted to IRS-recognized charities. This is a popular incentive for people who face significant capital gains taxation on the sale of their assets.

Liberty Street Advisory Group refers to the separate entities, Liberty Street Law, Liberty Street Capital and Trust & Estate Stewards. None of these entities or persons furnish actuarial, accounting or comprehensive tax advice. Liberty Street Law is a law firm, and does not provide investment management, or any financially-related services. Liberty Street Capital, is a limited liability company registered as an investment advisor in Georgia and other locations. Trust & Estate Stewards is a limited liability company. Past results are not a guarantee of future performance.