Charitable Giving

December 24, 2014 // Bucket Strategy Investing

Giving to others, whether it’s with money, resources, time, services, or assets, may truly help make the world a little bit better for ourselves and future generations. For every reason you may think of to give, there’s probably a charity with a matching need. Perhaps there’s an organization that you want to help reach its goals. Or maybe you’d like to leave a personal legacy. Or, you might just be looking to save some money on taxes. Whatever the reason, charitable giving may have virtually no downside.

Charitable contributions may be tax deductible within certain limits and guidelines, and it helps to know the rules. If you give straight cash, you are able to deduct the amount of cash given. If you donate money to purchase items from a charity or at a charity event, the amount you deduct is what you donate minus the value of whatever goods or services you may have received in return. If you decide to gift appreciated property, and you’ve held it for less than a year, your deduction is limited to your original cost basis. But if you gift appreciated property you’ve held for more than a year, you may actually deduct the entire fair market value of the property. You may avoid paying capital gains taxes on the appreciation, but your deduction will be reduced by whatever ordinary income you would have if you’d sold the property (such as recapture of depreciation).

Some people have asked us if they may deduct the time they spend providing charitable services. The answer there is, in a word, no. But if you had any incidental costs of the charity work that you did, such as unreimbursed expenses that you may have incurred while doing the work, you may be able to deduct those as part of your charitable contribution. Vehicle costs are one example (for instance, if you were charged any parking fees or highway tolls). In some cases, mileage driven may also be deductible.

These are just a few of the ways you could benefit charitable giving. Of course, the real benefit for most people may be the joy and satisfaction they receive from helping those who cannot help themselves.

Charitable giving rules can be complex and challenging to understand. Your financial advisor should make you aware of how charitable giving may affect your retirement planning process. For more information on how charitable giving may fit into your retirement planning strategy, call us today at 800-644-1150.

Information presented should not be considered specific tax, legal, or investment advice. You should always seek counsel of the appropriate advisor prior to making any investment decision. All investments are subject to risk including the loss of principal.

Investment advisor representatives of Lucia Wealth Services, a registered investment advisor, are also registered representatives of, and offer securities through, Lucia Securities, LLC, a registered broker/dealer, member FINRA/SIPC. Lucia Wealth Services and Lucia Securities, LLC are wholly owned subsidiaries of Lucia Capital Group. John Dean and John Ransom are not affiliated with Lucia Securities, LLC.

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