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Tax Savings Through Charitable Contributions

08.30.2017

Tax Savings Through Charitable contributionsThere are many ways that you can save on taxes while making a difference to an organization. If you own stock, you may want to consider using your stock for charitable giving.

When you make a gift of appreciated stock, you will receive a charitable income tax deduction based on the market value of your stock and avoid capital gain tax savings.

For instance, you may want to use stock to make an annual gift, fulfill a pledge, establish a professorship, or endow a scholarship or fellowship to your alma mater. Additionally, you may use your stock to fund a charitable life income plan, such as a charitable gift annuity or charitable trust.
A charitable life-income plan will provide lifetime payments, to an individual, a charitable income tax deduction and capital gain tax savings.

In order for a contribution to be deductible, it must go to a not-for-profit group that is approved by the IRS, such as religious, educational and public health and wealth organizations, as well as local volunteer groups. If you need to confirm a group’s standing, check out the IRS Search for Charities web page to search by the name and location of an organization. You can get information about tax-exempt organizations, including those eligible to receive tax-deductible charitable contributions.

Anne M. Ritter, CPAIf you have any questions before making a gift, please contact your tax advisor or Anne Ritter, Principal, Tax Services, at 636.754.0209 or aritter@bswllc.com.

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