Year-End PlanningAlthough the end of the year is still a few months away, we’re already overwhelmed by signs of the holidays. While it’s too early to starting wrapping presents, it is a great time to consider a year-end charitable gift. These sometimes “strategic” gifts offer many benefits to an individual or couple.

It’s a perfect opportunity for maximizing philanthropic goals, in particular tax savings now for 2015. It is important to understand the conditions that must be met to claim a charitable gift this year, which vary with the type of asset.

Here are a few things to keep in mind.

Timing of the Gift

The basic rule for timing of a charitable gift is that the contribution shall be allowed for the year in which the contribution is made.

To take it a step further, the Internal Revenue Service generally deems a gift made when delivery occurs. What is delivery? The answer lies in the type of asset used.

Stock

The timing of deductibility of stock depends upon when the individual relinquished control over that stock.

If the owner has a stock certificate, the gift is deemed complete when the certificate is delivered to the charity or the date of mailing (so long as it is received in the ordinary course of mail). If the individual’s broker transfers the stock, the gift is the date the stock is transferred to the name of the charity.

Checks

A charitable gift made by check is deemed complete when the individual unconditionally delivers or mails the check to the charity.

The deduction is available even if the charity does not deposit or cash the check until the next calendar year.

Credit Cards

A gift made by credit card is deductible in the year in which the charge was made, even though it may not show up on the individual’s credit card statement until the next year. This is because individuals become liable at the time the charge is made.

Telephone Transfers

If an individual makes a direct payment from a bank account to a charity, the gift is deemed complete when the bank makes the payment as reflected on the person’s monthly statement.

Year-end gifts to charity are beneficial for both individuals and organizations. Just remember the timing and delivery of such gifts, in order to maximize your charitable deductions.

One way timing can be to your benefit is through a Donor Advised Fund, where you have the opportunity to give your gift today, receiving the full tax deductibility at the time you make the gift and create the fund, and then designate your gifts to the charity of choice over time.

Please call 623.832.5330 or email us at info@sunhealthfoundation.org for additional information. And, of course, always check with your personal tax advisor.

(Originally published in the October issue of LiveWell magazine.)

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