Five Tips for Year-End Giving

If you’re like most people, you do the majority of your charitable giving toward the end of the year. Here are five tips to help you make the most of year-end giving.

Calculate your income

Try to get a handle on your tax liability for the year. Did your unearned income increase? Did you sell any appreciated assets? Will you owe more taxes? This might be a good motivation to make a gift before December 31. In fact, if you have an especially large tax liability this year, you can move some of your giving forward from next year and create a larger income tax charitable deduction this year. Non-itemizers might find this “grouping of gifts” useful in order to take advantage of an itemized tax return every other year.

In any case, by the time you fill out your income tax return, it will be too late to make charitable gifts for the previous year. So, do some planning while you still have time to make a year-end gift.

Review your stocks

Do you own stocks that you have held for more than a year? Which ones have appreciated the most? It might be wise to make your year-end gift using one or more of these stocks. Here’s why: If you sold the stock, you would incur capital gains tax on the appreciation. However, if you give the stock and allow CMU to sell it, no one pays tax. And you get a charitable deduction for the full amount of the stock, just as you would if your gift was made with cash. If you can’t use all of the income tax charitable deduction resulting from the gift this year, you can carry it forward for up to an additional five years. Stock gifts are deductible up to 30 percent of your adjusted gross income.

Consider a life-income gift

CMU offers a variety of life-income plans which might fit your needs (gift annuities, pooled income funds, trust arrangements, etc.). You can make a gift now, obtain tax benefits and receive income for a period of time or for the rest of your life. We can provide you with personalized illustrations and printed material to assist you and your advisor(s).

Do your giving early

If you want to make a gift of noncash assets (stock, real estate, etc.) or create a life-income gift (see above), you will want to start as early as possible. Your professional advisor(s) may be very busy as the year winds down. The sooner you can get your gift activity going, the more assured you can be of having the gift completed before the end of the calendar year.

Talk to your advisor

Before making any significant gift to CMU, or to any charity, you should have your CPA, attorney, or other advisor help you understand the impact of your gift on your income tax return and estate. We want your giving to be prudent as well as generous and joyful.

For more information about year-end giving opportunities at CMU, especially in the College of Business Administration, contact Jody Patton at (989 774-1732 or patto2ja@cmich.edu.