No doubt you are reading plenty about potential tax planning strategies in this post-election environment. Now is a great time to lean on the staff at the Winona Community Foundation as you work with your attorney, CPA, and financial advisor to determine whether and how to update your estate and tax plan. Here are three examples of the wide range of charitable planning topics we’d be glad to discuss with you and your advisors as you look into the future:
Use your IRAs for charitable giving. Even with all the question marks, it is reasonably safe to suspect that IRAs will remain excellent tools for charitable giving. If you are over the age of 70 ½, absolutely get in touch with us to arrange for a tax-savvy Qualified Charitable Distribution of up to $105,000 (increasing to $108,000 in 2025) to a designated, field-of-interest, or unrestricted fund at the Winona Community Foundation.
Time for a charitable lead trust? We can help you and your advisors evaluate whether a potential continuation of low interest rates might mean that a charitable lead trust (CLT) would be a good fit for you. CLTs are a really beneficial but underutilized tool that can help you accomplish multiple goals – having a charitable impact, passing assets to heirs in a tax-advantaged manner, and reducing the size of your estate. Through a charitable lead trust, you determine which charities receive annual distributions from the trust. This can include any number of funds at the Foundation, including a donor advised fund. After a set period of time or upon your passing, the fund can revert back to you or pass onto your heirs, minimizing tax consequences. You can also use a CLT to take advantage of the presently high estate tax exemption, especially in light of uncertainty as to whether it will continue past the end of 2025. CLTs can be complicated, so it is essential you work with an attorney and tax planner to ensure your goals are mt.
Bunching your charitable gifts. Right now, the standard deduction is still high, which is great, but also means you may not itemize and get to take advantage of a charitable deduction. That is why it is a good reason to consider adding to or establishing a donor advised fund at the Winona Community Foundation. If you combine multiple year’s giving into one calendar year, you can take advantage of the charitable tax deduction in that year but support your causes over multiple years as you recommend grant distributions from your DAF. You receive an even greater tax advantage if you donate appreciated stock because not only do you receive a charitable deduction, you avoid capital gains tax.
The net-net here is that we encourage you to reach out! The staff at the Winona Community Foundation is here to help you support your favorite causes. It is our honor to serve as your home for charitable giving.
