Tips for planning year-end gifts

Part 2 of a 2-part series

By Trudy Lee

director of planned giving

Southeast Missouri State University Foundation

If you're like most people, you do your major giving toward the end of the year. This probably occurs for several reasons. The closing of the tax season encourages itemizers to obtain income tax deductions; a barrage of earnest appeals by nonprofits increases awareness of financial need; and many are simply predisposed to end the year by making a charitable gift.

You may have taken steps already to avoid the year-end crunch (as suggested in part one of this two-part series). If not, it's not too late to make a special year-end gift during this "season of giving."

Calculate your income

Try to get a handle on your tax liability for the year. Did your unearned income increase? Did you sell any appreciated assets? Will you owe more taxes? This alone may motivate you to increase your giving before Dec. 31.

In fact, you may even want to accelerate your giving by moving some of your gift forward from next year to create a larger income tax charitable deduction for yourself this year. Non-itemizers may especially find this "grouping of gifts" useful in order to take advantage of an itemized tax return every other year.

In any case, by the time you fill out your income tax return, it will be too late to make charitable gifts for the previous year. Take the time to do some planning while you still have the opportunity to make a year-end gift.

Review your stocks

Look at the stocks you have held for more than a year. Which ones have appreciated the most? It may be prudent for you to make your year-end gift using one or more of these stocks. Here's why: If you sold the stock, you would incur capital gains tax on the appreciation. However, if you give the stock to a qualified charity and allow the charity to sell it, no one pays tax. And you get a charitable deduction for the full amount of the stock, just as you would if your gift was made with cash.

And what's more, if you can't use all of the income tax charitable deduction resulting from the gift, you can carry it forward for up to an additional five years. Such gifts are deductible up to 30 percent of your adjusted gross income.

Most charities are able to accept stock transfers via an electronic transfer. Delivering a stock certificate works as well but requires certain documentation. You or your broker can contact the charity to determine how to complete this transaction. There is still time, but it's best not to wait until Dec. 31 to complete such a gift.

Talk to your adviser

Before making any significant gift to charity, you should have your CPA, attorney or other adviser help you understand the impact of your gift on your income tax return and estate. Your local charities want your giving to be prudent, as well as generous and joyful.

Leave A Legacy of the Heartland

Leave A Legacy of the Heartland is community-wide educational effort to increase awareness and provide education on the benefits of planned giving throughout Southeast Missouri and Southern Illinois. The following charities have participated this year:

American Red Cross

Area Wide United Way

Boy Scouts of America - Greater St. Louis Area Council

Chateau Girardeau Foundation

Community Counseling Center Foundation

Court Appointed Special Advocates (CASA) of Southeast Missouri

Friends of Cape Girardeau Public Library Foundation

Girl Scouts of Otahki Council

The Humane Society of Southeast Missouri

Kenny Rogers Children's Center

KRCU 90.9 FM, Southeast Public Radio

Lutheran Family and Children's Services

Old Town Cape

Regional Family Crisis Center

Riverside Regional Library

Safe House for Women

SEMO Alliance for Disability Independence (SADI)

SEMO Network Against Sexual Violence

Southeast Missouri University Foundation

Teen Challenge International of Mid-America