The saying goes, “It is better to give than to receive.” But when working with your clients to help them help others in need, your role provides the professional know-how that guides them to ways they can best give AND receive the tax benefits and outcomes they desire for their donations. Here are a few thoughts to keep in mind as you work with your clients in the coming months.
Submitted by Brendan T. Conry, AI, ChFC, CLU - Conry Asset Management, LLC
Gift shares of highly appreciated stock (i.e. Stanley Works) to your favorite charity.
Consider with diligence a ROTH IRA conversion or partial conversion
Submitted by Robert A. Scalise Jr, Esq. - Ericson, Scalise & Mangan P.C.
Certain people can save a lot of taxes by making large gifts to family members before year-end, and paying a gift tax on the transfer. Because the gift tax rate for 2010 is “only” 35%, and the estate tax rate is scheduled to shoot up to 55% in 2011 (unless Congress changes the law), your client may be able to get a much better tax rate by making gifts now instead of later on or through bequests in their will.
It is important to consider that if your client makes a gift now and they die within three years, the advantage of this tax break is reduced because the amount of tax paid will be considered part of your client’s estate for tax purposes. But they won’t be any worse off tax wise, and the gift may help them achieve some important philanthropic goals now, when charities are especially in need, so it is something to consider.
Submitted by Marc Pelletier - Marc S. Pelletier, P.C., CPA
Much has been written about donating noncash assets like stocks or vehicles to charitable organizations, but what about the other big item in your client’s estate—life insurance? While there are many IRS policies (beyond the scope of this article) to be considered by you and your client to ensure a deduction is afforded for their donation, it is an opportunity to consider. Do they have a policy they no longer need? Would they rather cancel the policy or donate the policy? Donating the policy to their favorite charity might offer them a creative way of achieving their charitable giving goals that hasn’t been considered.
Submitted by Judith Blessing, CPA, CSEP- Miller Moriarty & Company, LLC
Important Dates to Remember:
December 31, 2010 - last date on which a 2010 ROTH IRA conversion may take place
April 15, 2011 – last date for an IRA contribution, due date of 2010 1040, last date on which the tax liability on a 2010 conversion may be paid unless the two year election is made to pay the tax in 2011 and 2012
October 15, 2011 – last date on which a recharacterization of a 2010 conversion may be made…remember, it’s reversible up to here
The Community Foundation of Greater New Britain would like to thank our professional advisor partners above who kindly submitted ideas for this article and to all our partner advisors as well. We welcome questions from those who may not have worked with us yet and look forward to the opportunity to work with you all in the future. You’ll find answers to many of your questions on the myriad of benefits a Community Foundation gift can provide to charitable donors here, and we encourage you to give us call to learn more.
Contact Ann Bova, Director of Development
860-229-6018, x302
above@cfgnb.org
CFGNB does not provide tax or legal advice, and that all donors should consult with their personal tax advisors