Congress extended legislation through the end of this year to allow up to 100% of a taxpayer’s Adjusted Gross Income (AGI) to be deducted for CASH gifts to charities (excluding supporting organizations, private foundations and donor-advised funds). This creates a special opportunity to accelerate one’s charitable giving without adverse tax consequences and potentially right-size some asset classes. While cash gifts from savings or income qualify, donors over 59 ½ may also take distributions from pre-tax qualified retirement plans (401k, IRA, etc.) as income and donate that cash as well. The 100% AGI deduction eliminates the income tax for this transaction. Please note, this does increase one’s AGI and that might trigger other tax consequences. If you have excess assets in one of these plans, consult with your tax advisor to see if this might be a good way to do good while avoiding taxes in the future. Onetime gifts from this opportunity would make excellent assets to create a designated endowment for your favorite organization to provide annual support forever. Or, to create a discretionary fund to advance your philanthropic vision.
The purpose of this website is to provide general gift, estate, and financial planning information. The Community Foundation for Northeast Florida is not engaged in providing legal or tax counsel. For advice or assistance in specific cases or whether to make certain a contemplated gift fits well into your overall circumstances and planning, the services of an attorney or other professional advisor should be obtained.