9 Tax-Smart Giving Strategies for 2019

1. Use a Donor-Advised Fund

A Giving Fund at NCF (also known as a donor-advised fund) works like a charitable checking account, but instead of depositing money and writing checks, you contribute all types of assets (cash, stocks, non-cash assets), receive an income tax deduction at the time of the donation, and then go online to recommend grants to your favorite charities.

2. Tax-Smart Strategies for Non-Itemizers

With the passage of the Tax Cuts and Jobs Act on December 22, 2017, it is estimated that as many as 90% of taxpayers may not itemize their deductions, and instead will use the dramatically increased standard deduction. However, with wise planning, many of these families can nonetheless capture some level of tax benefit with the following strategies.

3. Giving Publicly Traded Stock

If you are currently writing checks to charities, but also have appreciated stocks or mutual funds in a taxable investment portfolio, you likely have a significant opportunity to pay less tax, give more, improve your personal cash flow, and simplify your giving. The key is to donate these before the sale to reduce or eliminate taxes.

4. Giving Real Estate Before a Sale

NCF allows you to give interests in appreciated real estate (raw land, residential, and/or commercial real estate) to NCF prior to sale. This strategy avoids capital gains taxes on the gifted portion, and you will likely receive an income tax deduction for the appraised value of the gift, freeing up additional cash flow for more giving.

5. Giving Privately Held Stock Before a Company Sale

Donate a non-voting interest in your business to your Giving Fund at NCF before the sale, receive a substantial tax deduction, reduce or eliminate capital gains taxes on the gifted interest, and convert those tax dollars into more giving to your favorite charities.

6. Zero Estate Tax Planning

Upon death, there are only three places assets can pass: family/friends, charity, or the government. For families with exposure to the federal estate tax, wise and thoughtful planning can completely eliminate the estate tax liability and enable them to redirect those taxes for charitable impact.

7. Creatively Pass Your Business to Your Kids

Rather than creating a wealth-transfer strategy for the family business, gift the business to your Giving Fund at NCF. Children working in the business can request to purchase the business from NCF, and the proceeds are available for you to grant to your favorite charities.

8. Use a Donor-Advised Fund With Your Private Family Foundation

We can provide greater tax savings, easier administration, and a variety of ways to make your giving more flexible, efficient, and enjoyable.

9. Using Your Business to Fund Charity

We have an innovative solution called the “Charitable Shareholder” strategy, which allows you to donate a non-voting interest in your business to NCF, receive a substantial tax deduction, and still maintain management oversight of your business (through the retained voting interest).