BY: Chris Kelly, JD
Market President, Nashville
BY: Michael Romero, JD,CWS®
President, Heritage Trust
As we enter the holiday season and reflect warmly on our memories of Thanksgiving, many of us are feeling lucky and grateful for the blessings in our lives.
Soon we’ll get into the bustle of buying gifts, sending out cards and taking part in other cherished seasonal traditions. And, although we don’t mean to, sometimes our sincere intentions of sharing our time and financial abundance with those who are less fortunate get pushed off to the side.
What GivingTuesday means
But today, we have a special opportunity to put philanthropy and generosity front and center in our minds. GivingTuesday, held annually on the Tuesday after Thanksgiving, is a worldwide day of giving that encourages individuals, communities and organizations to improve their local communities by supporting their favorite charities and causes in meaningful ways during the holiday season.
Although there are no special tax benefits to investors for donating on this particular day (any contributions are treated the same as other gifts made throughout the year), there are a few general strategies that investors can utilize so that any donations they make today — or any day, for that matter — will have the greatest impact:
1| Though recent trends in the investment markets have negatively affected the values of securities in the last year or so, many investors may still incur capital gains if they were to sell their investments. Those in this situation should consider donating those assets directly to a charitable organization. If you donate appreciated assets that you’ve held for more than a year, you can avoid paying taxes on the gains that would be due if you sold the assets yourself and donated the proceeds. In addition, you can take a charitable deduction for the assets’ fair market value on the day of your donation.
2| Retired individuals or couples who have money in traditional IRAs can take advantage of qualified charitable distributions (QCDs) for their charitable giving. Using a QCD, an investor who is age 70 ½ or older can give up to $100,000 a year to a 501(c)(3) charitable organization directly out of their IRA. If the investor is over 72 years of age and required to take required minimum distributions (RMD) from their IRA, a QCD from the IRA can fulfill the annual RMD requirement. The distribution is not considered part of the investor’s adjusted gross income for tax purposes when the distribution goes directly to the charity of the donor’s choice. Thus, the RMD is satisfied, no taxes are due, and a worthy charity receives a nice contribution to further its mission.
3| Although the process takes a bit of time, charitably minded investors can open a donor-advised fund (DAF). Donors can fund their DAF with cash or other assets and then later decide when the money is distributed and to which charities. Although the donor does relinquish control of the money permanently and can’t decide to take it back, they do receive a tax deduction for the gift right away, even if they haven’t chosen a recipient yet. A useful strategy in some circumstances is to place multiple years of future charitable future contributions in a DAF in one calendar year in order to optimize the tax benefit of deducting charitable contributions.
To assist our clients in this process, Argent created its own donor-advised fund administered by our 501(c)(3) Argent Foundation, so your advisor can easily assist you if you would like to move forward with this idea.
Argent’s culture of generosity
At Argent, we work to foster an attitude of generosity both as a company and among our individual employees all year long. Many Argent employees donate their time to causes that matter to them personally, which we chronicle and celebrate with our monthly Argent Gives Back series.
GivingTuesday comes just once a year, but as we celebrate the joy of this season, we encourage everyone to adopt a mindset of generosity — not just today, but in our daily lives. There are countless ways to help those around us that go beyond making financial contributions — making meals for the homebound, babysitting for a friend, and running errands for an elderly neighbor. Let’s use today as an excuse to be outwardly focused, to take stock of how fortunate we are and give back however we can.
Taking the next step
If you’d like to discuss in more detail the charitable-giving options available to you, contact your Argent relationship manager, or give one of us a call via our main number at (800) 375-4646. We look forward to hearing from you.
