I recently read a study by The Center on Philanthropy at Indiana University. “The 2008 Study of High Net Worth Philanthropy,” sponsored by Bank of America, found that over 90 percent of households surveyed planned to make donations using cash and checks in the near future. A little over 30 percent planned to donate securities.
As you probably know, donating appreciated securities has tax advantages. Sure, it is not as easy as writing a check. With proper planning and some paperwork, you can lower your tax burden while providing the donation amount you already planned to give.
It is important to consider the option this year if you had a major tax event. Perhaps you converted from a traditional IRA to a Roth IRA. Maybe you have a capital gain from a stock sale. Donating appreciated securities could minimize the resulting tax burden.
Such donations can also become part of long-term estate planning. Do you want to provide a legacy for the charity or charities of your choice? Do you want to donate a fixed sum every year? Would you like for your children to be involved in charitable giving decisions?
Your investment advisor can assist you with both your short-term and long-term charitable giving strategies. If you are interested in donating securities this tax year, I urge you to contact your advisor soon. It is best to submit securities donations as early as possible to ensure processing before December 31.
Cristy Freeman, AAMS
Senior Operations Associate