Make Charitable Donations From Your IRA
Congress restored the provision that allows seniors to make up to $100,000 in charitable cash donations directly out of your IRA for 2011 – if you’ll be age 70 or older by year-end. Such direct-from-IRA donations are called qualified charitable distributions, or QCDs.
Donations made in this fashion don’t directly affect your tax bill, because QCDs are tax-free and no deductions are allowed for them. However, QCDs count as withdrawals for purposes of meeting the required minimum distribution (RMD) rules that apply to traditional IRAs. Therefore, taxes can be avoided by arranging for tax-free QCDs in place of taxable RMDs, and this advantage is available whether you itemize deductions or not. If your spouse owns IRAs and is over age 70, he or she is entitled to a separate $100,000 QCD for 2011.
Give to Charities
For those whose charitable instincts are stronger than the economy, here are two suggestions:
Donate Appreciated Stock to Charity
If by some miracle, you have appreciated stock shares (meaning they’re currently worth more than you paid for them) that you’ve owned for more than a year, consider donating them to an IRS-approved charity. You can generally claim an itemized charitable contribution deduction for the full market value at the time of the donation and avoid any capital gains tax hit.
Sell Losers and Donate Cash
On the other hand, don’t donate loser stocks. Sell them, book the resulting capital loss, and give away the cash sales proceeds. That way, you can generally write off the full amount of the cash donation while keeping the tax-saving capital loss for yourself.
Warning: You must itemize deductions to gain any tax-saving benefit from charitable donations, unless you make them out of IRAs.
Other Good News for NWA NPOs: Walton Arts Center Tickets for NWA Nonprofits
At the AFP National Philanthropy Day Missy Kincaid of the Walton Arts Center shared a program that the WAC offers to NPOs. It is called the Take A Seat program. It is very much beloved by not only the WAC staff, but also its generous donors and grantors who give to the Walton Arts Center every year so that this program continues. WAC encourages NPOs to participate this season because there are so many more exciting performances yet to come!
Walton Arts Center believes that the arts are an essential part of life for everyone in our community. They connect and engage people of diverse backgrounds and interests and open up new ways of seeing the world. It brings people together through the common bond of participation, exploration and enjoyment. We want to be able to bring everyone to the arts, regardless of the financial ability to do so, which is why the Take A Seat program was created.
Each season, WAC invites local non-profit organizations that serve students, seniors, children and families who could not otherwise afford to attend Walton Arts Center performances to experience the arts at no cost. Participating organizations are asked to fill out an application and request tickets based on the interest and preference of the clients they serve. WAC then determines, based on availability of tickets for that performance, whether we will be able to fulfill the request.
If you are interested in applying to our Take A Seat program, visit the WAC website’s Tickets for your non-profit page http://www.waltonartscenter.
We hope that you will consider participating in Take A Seat to help those you serve to experience the amazing power and magic of the arts!
We Are Thankful for Our Opportunity to Grow Philanthropy!
Paul and Walt are thankful that Gardner & Associates continues to be blessed with clients who put our advice to work to increase their giving.
Daily we are reminded of the increased demands for services and challenges to meet your budget in this economy. We trust that our counsel to our clients and through this newsletter helps to improve your chances to succeed and thrive.