2023 GENEROSITY OPPORTUNITIES
tips for year end gifts
“I was seldom able to see an opportunity until it had ceased to be one.”
Mark Twain’s statement seems quite appropriate for the Christian steward who is hearing God’s call to maximum generosity. Out of the turmoil and challenges of these last few years has some truly unprecedented opportunities to benefit the ministries we love. We offer these brief explanations as a primer, and we would be honored to discuss any or all with you. But be advised, should you want to explore these opportunities for your 2023 tax return, all gifts must be completed by December 31. So, if you are intrigued by saving taxes and motivated to give to the Lord’s work – please read on…
Cash In – Cash Out – No Tax Paid – If all three of these apply to you:
- Qualified retirement assets that would normally be taxable if withdrawn
- At least 59.5 years‐old
- You want to make a generous charitable gift
A Basket Full of Losses – If you have an investment that has lost capital value – and you wish to make a charitable gift – you can get a “two‐fer.” Sell the asset at a capital loss, make a gift of cash from the sale, and then use the capital loss and the charitable deduction to reduce your taxable income.
Deduct a Gift Now – Deliver the Gift Later – If you have real property (house, farm, or vacation home) which you would like to leave to your favorite ministry in the future – you can make the gift in 2023 but retain the use of the property for your lifetime. You will receive a charitable tax deduction for the future gift you guarantee today and have up to six years to use the full deduction.
Maximum Tax‐Free Income and a Charitable Gift in the Future – For those who want to be generous with Kingdom Work – but need the income produced by their assets – a Charitable Gift Annuity (CGA) may make a lot of sense. With the CGA, you may receive an immediate tax deduction and income for life. Much of the income will be paid to you tax‐free. Income after actuarial life expectancy will be taxed as ordinary income.
Avoidance of Capital Gains Tax, Income, a Charitable Deduction, and a Future Charitable Gift – If you want to sell highly appreciated assets without paying tax at the time of the sale, The Charitable Remainder Trust is a flexible tool to achieve your goals. You can continue to receive income from the asset value, receive an immediate tax deduction, and make a future gift to your favorite ministry or ministries.
Charity Picks the Fruit – Family Gets the Orchard – Technically referred to as a Charitable Lead Trust, the concept has long been a secret of the “super wealthy.” The “fruit” picked by the charity is annual income. The “orchard” is the asset producing the income. Once the ministry has picked enough fruit to offset the transfer tax to your family – the orchard (and the future fruit) can pass to the family tax-free.
Qualified Charitable Distributions –Sometimes referred to as a Charitable Rollover, the QCD allows you to instruct your IRA custodian to send up to $100,000 per year to your favorite ministry or ministries. While this is not expected to change in the future, your window of opportunity for 2023 closes on December 31. Most custodians need at least a few weeks to process the distribution, so the sooner you initiate it the better.
*Eastside does not provide legal or tax counsel. Not all opportunities may apply to all individuals. Please consult your own professionals regarding possible benefit to you in your unique tax situation.
Are you wondering about tax-advantaged gifts or non-cash assets like homes, businesses, equities and other illiquid assets? Click on the “learn more” button below for resources on creative generosity and for an “Estate Planning Guide”. You can also schedule a free and confidential consultation with an estate planning professional about your estate giving goals.