As attorneys, CPAs, and financial advisors, you know that you have clients’ attention when tax season rolls around. This makes it a great time to cover tax planning strategies for the current year and beyond. To help incorporate charitable giving topics into your tax season client conversations, we’ve put together tips to address three scenarios where the Foundation can assist your efforts.
Take advantage of QCDs sooner rather than later.
If: Your client missed the 2024 deadline for a QCD.
Then: Make sure the client took an RMD for 2024 (if required to do so). Start planning now for 2025 QCDs, paying very close attention to the required process. QCDs are an excellent tool for your clients who’ve reached the age of 70 ½ to give to a designated, field of interest, scholarship or Foundation-directed fund (donor-advised funds are not eligible). If the client waits until the last minute at year-end, there might not be time for the transaction to be completed by Dec. 31 as required. Plus, QCDs executed early in the year can help avoid negative effects of the “first-dollars-out rule” so that the QCD can count toward your client’s 2025 RMD.
See the last section in this issue for more information about QCDs.
Watch for charitable giving opportunities in business succession planning.
If: Your client is beginning to consider exit strategies for a closely held business.
Then: Reach out to the Foundation right away. Gifts of closely held stock to a charitable fund can be a very useful component of a business succession plan. That’s because a client can gift shares of the business, which in turn means that no capital gains tax will apply to the gifted portion when the business eventually sells. The proceeds of the gifted shares flow into the fund to be used for your client’s charitable priorities. Keep in mind that timing is crucial; if a deal is in the works at the time the shares are transferred to the charitable fund, the charitable deduction is in jeopardy.
Leverage appreciated securities for maximum charitable impact.
If: Your client experienced significant portfolio growth last year.
Then: Consider recommending early-year gifts of appreciated securities to a Foundation fund instead of waiting until December. When stock positions are currently at high valuations, making charitable gifts now could optimize both tax benefits and philanthropic impact. Remember that gifts of appreciated stock to public charities qualify for a tax deduction at full fair market value. Additionally, when these securities are sold within the charitable fund, your client avoids all capital gains tax, directing more resources toward their charitable priorities.
Our team is ready to serve as your philanthropic partner for any client situation involving charitable giving. Please contact us whenever charitable planning enters your client conversations.
For more information about how we can help you serve your philanthropic clients, contact Monika Collins, mcollins@delcofoundation.org. We’re always available to answer your questions about philanthropy or to schedule a personal consultation with you and your clients – all at no cost.
