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Articles Tagged with charitable giving

Nathan VinsonBelieve it or not, the end of 2020 is quickly approaching (insert collective sigh of relief). While I think most of us are ready to start looking forward to 2021 and would prefer to not even have to utter the words 2020 anymore, now is the time to finish off the year strong by reviewing simple, yet important, year-end tax planning and wealth transfer tips.

When most people think of tax planning and wealth transfer, they may have in mind complex estate planning documents and an overload of legal and accounting advice.  But that doesn’t have to be the case.  Here are three simple tips that you can implement with relative ease, though you will want to consult your tax advisor first.

1. The Annual Gift Tax Exclusion. The simplest tax planning and wealth transfer technique involves the all-too-familiar annual gift tax exclusion.  The annual gift tax exclusion is an amount that a person may give to another person without having to file a gift tax return or otherwise report to the IRS.  The current exclusion is $15,000 per person receiving the gift.  The exclusion is indexed for inflation, but it may only increase in $1,000 increments.  Further, married taxpayers may elect “gift-splitting,” which basically doubles the amount of the gift that they may make to one person using the gift tax exclusion; for each person receiving the gift, the limitation would be $30,000 rather than $15,000.  For example, if a married couple has two children and four grandchildren, they can give up to $30,000 to each of these people tax-free and without having to report it to the IRS.  Therefore, the married couple may transfer $180,000 total to the children and grandchildren.  Going further, if the children are also married, the taxpayers may give an additional $30,000 to each child’s spouse, which may be desirable if the child and the spouse hold a joint checking or investment account.  Note, however, that a gift tax return would need to be filed if the taxpayers elect gift-splitting.  The gifts are not taxable at all, but the IRS would like to know that the $30,000 was gifted via gift-splitting.

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

This is that time of year when we all start thinking about taxes – and how to pay less. We’ve often gotten the news from our accountants that perhaps our refunds won’t be as large as we’d like or that we owe. Ugh to both.

This is a good time to consider if your business can be more charitably minded, and perhaps help you pare back the tax burden next year.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

You’d think giving money away would be easy, wouldn’t you? And for the most part, it is. But it’s important to pay attention to some of the details so you don’t end up getting socked with a tax bill or missing out on a tax deduction in return for your generosity.

In our last post, we discussed how to give money to your children, grandchildren or anyone else you’d like without much complication (such as having to file a gift tax return).  Now, let’s turn to gifting that can net you a tax deduction on your income tax return (in addition to just making you feel good).

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By Nathan Vinson, Attorney

English, Lucas, Priest and Owsley, LLP

IRA gift provisionOver the past decade, Congress has passed a law – usually at the last minute – that allows for gifts directly from Individual Retirement Accounts to charitable organizations with favorable tax treatment. The gifts can be up to $100,000 to qualifying organizations, but it has to be made directly to the charity. The IRA gift provision has been a popular way for some to give to their favorite organizations, for two key reasons:

  • The gift counts towards your required minimum distribution from your IRA for the year. As you may know, seniors ages 70.5 and up are required to take a minimum distribution from their IRA each year.
  • The gift is excluded from taxable income. The money won’t be included in your taxable income (as it would otherwise) if the money is paid directly to the qualifying charity.

Only those who are 70.5 or older can take advantage of it.

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computer Every tax season, there are at least a few of us who have some unwelcome surprises. Some discover they were not nearly as organized as they should have been, and can’t find receipts for items they wanted to write-off as business expenses. Others may discover that they made more income than they anticipated, and they owe additional unanticipated taxes.

There are plenty more unwelcome surprises, sometimes having to do with divorce or custody issues. Couples sometimes trade off who gets to claim a child as a dependent, and misunderstanding whose turn it is leads to confusion (and fighting).

If you own your own business, or just make some side income from consulting, you may find out that you owe taxes because you didn’t pay enough estimated taxes during the year. That’s a common problem that we see often with clients.

The best time of year to address these problems is right now. Tax attorneys, accountants and other financial professionals aren’t quite as busy as they are in the first and last quarters of the year executing year-end transactions, followed by preparing returns for clients, and the mistakes you made in 2014 are fresh in your mind. A few simple tips and tricks can get you ready for April 15, 2016.

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By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

oopsIn fundraising and higher education circles, the imminent closure of Sweet Briar College in rural Central Virginia has been much-discussed. This small, women-only college has existed for nearly a century and has educated generations of women. But enrollment has declined and school’s board of trustees announced that this year’s graduating class in May will be its last.

One alumnae, Teresa Tomlinson, the mayor of Columbus, Georgia, noted that she had told college officials she was going to leave $1 million to Sweet Briar in her estate, and they greeted her news graciously and pleasantly, full of thank you’s and personal notes — and then announced two weeks later the school was closing. The mayor said she was baffled why school officials didn’t disclose this to her when she told them about the gift.

Even if the school changes course again and decides to remain open, those who were going to leave money to the college are probably going to be reluctant to do so again. But what would happen if Sweet Briar College was to receive a gift but then the college closed and the will could not be changed?

This happens from time to time with colleges, non-profits and other organizations that are likely to receive bequests from alumni and supporters. The foundation you wanted to support could have merged, changed its goals, re-branded as something else entirely or simply shut its doors. Then what?

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