Tax Benefits of Giving
The end of the calendar year is a time when many consider the benefits of making charitable donations in order to maximize tax savings.
Regardless of your income, if you itemize deductions on your tax return you can almost always lessen the amount you owe.
- For those wondering whether to sell depreciated stocks or other securities they hold as a result of the difficult stock market climate this year, instead of simply absorbing the loss at this time, sell them, taking the tax deduction for the loss, and give the proceeds to charity. The tax benefit from the charitable donation may further offset any other capital gains.
- Instead of taking just the standard deduction on your tax return, consider doubling or tripling your charitable contributions in alternate years. This way, you may be able to deduct enough to itemize every second or third year.
- If you would like to make a contribution and receive a charitable income tax deduction this year, but can’t afford to give up the income from a particular asset, consider a life-income gift – a charitable gift annuity or charitable trust. Based on your age and IRS calculations, you could receive income for life for yourself and/or another individual, and receive a charitable income tax deduction as well.
- If you have a vacation home or other real estate you are not using, plan now for a gift of the property next year and you may not only avoid any capital gains tax, but also receive a charitable deduction for the property’s full fair-market value.
The decision ultimately depends on each individual’s particular financial and tax situation. Contact your tax advisor to determine what will work to your best advantage.
If you have questions about making gifts or how to set up a gift to provide a steady income stream plus tax benefits, contact us at the Winona Community Foundation.
Gifts of Stock
Appreciated stock is a smart way to give. When you contribute stock directly to Winona Community Foundation you will avoid capital gains tax and still receive the full market value of the stock for tax purposes. Stock transfers normally take only a couple of days but may take longer during busy times such as the end of the year.
It is always best to contact us before making a transfer. This way we can ensure it is processed and acknowledged in an accurate and timely manner. The following information is all your broker or agent needs to know to complete a transfer from your account to that of the Winona Community Foundation.
Financial Institution: WNB Financial Trust Department
DTC #: 2039
Institution #: 94952
Account #: 11053-c for further credit to WNB Financial F/B/O WN1773 Winona Community Foundation
Mutual Fund Shares
Call WCF at (507) 454-6511 to get the easy transfer instructions. All mutual fund shares require about 3 weeks to transfer to WCF and complete the gift, so start now if you plan to gift mutual fund shares. Gifts of mutual fund shares provide the same tax benefits as stock gifts. To count as a charitable income deduction in 2011, gifts of mutual fund shares must be received into WCF’s account before the close of business on December 30th.