As we approach the end of the year, we wanted to remind you about charitable giving strategies to maximize the support you can provide organizations, along with reducing your overall tax liability—not just income tax, but capital gains tax and even potential estate tax exposure for your heirs. However, please keep the possible impact of the upcoming election in mind as changes in tax law may impact your investments and giving strategies.
Key Year-End Charitable Giving Strategies: Donations to charity can reduce your overall income tax bill if you itemize your deductions. You can also avoid the application of capital gains taxes if you are disposing of assets such as stock that have appreciated in value. Gifts of retirement assets can provide a current tax benefit as well as remove the gifted assets from your estate. Here are some tips to consider:
• Gift Appreciated Assets: Charitable gifts of appreciated assets remain a best practice, and with the rise in stock market values over the last 12 to 18 months, you may have experienced significant growth in your investment portfolio. Such gifts can provide you with a deduction for the full current value of the asset, but also avoid the capital gains tax that would apply if you sold the assets yourself rather than gifted them. Conversely, assets with built-in losses generally should be sold (generating a tax loss) with the resulting cash proceeds donated, if desired. Note, that up to $3,000 in capital losses may be used to offset other income on your tax return.
• Donate to a Donor-Advised Fund (DAF): If you are considering making a significant donation to charity over time or just want the ability to plan your charitable grants over a period of years, consider opening a DAF or adding funds to an existing DAF. Funding your DAF with appreciated assets can be especially beneficial as you again avoid any capital gains liability. The Foundation is well versed in accepting appreciated assets; these include publicly traded stock, as well as other types of non-cash assets such as life insurance, privately held business interests, real estate, and certain collectibles.
• “Bunching” Charitable Gifts Can Magnify Tax Benefits: Combining these two strategies can enhance your tax savings by “bunching” two or more years of contributions this year. The larger contribution can create a bigger tax benefit this year and then provide a fund from which distributions can be made over several years to satisfy your anticipated charitable giving. This approach is especially helpful for donors who might not otherwise be eligible to itemize their deductions. Only taxpayers who itemize their deductions get a tax benefit from a charitable gift. By bunching into a DAF this year, you can increase the total amount of deduction to a level at which it may be more advantageous to itemize than to rely on a standard deduction.
• Utilize IRA Charitable Rollovers: If you or your spouse are over age 70½, the IRA charitable rollover is an attractive option that permits you to transfer up to $105,000 this year from each of your individual retirement accounts directly to a charity or to a DJCF/SWCF endowment or scholarship fund, free of any income tax. In addition, such rollovers help satisfy the IRA minimum distribution requirement if you’ve reached the age where such distributions must be taken into income (generally when you reach age 73). The rollover also removes these retirement assets from any potential estate tax exposure.
• Accelerating Non-Charitable Family Giving: The current unified estate and gift tax credit of $13.61 million is currently scheduled to decrease to around $7 million beginning with transfers made in 2026. Accordingly, if you intend to make significant family gifts (either during your lifetime or in your will), you may want to consider accelerating some or even all those gifts earlier, as your resources permit.
• Watch for Legislative Changes: As with any significant tax and charitable planning, it is recommended that you carefully consider potential changes in the context of your complete financial portfolio and consult with your tax and financial advisors. The new Administration and the next Congress will need to consider significant tax legislation in 2025, as virtually all the provisions passed in 2017 that relate to individuals will be affected.
Your Foundation professionals will be happy to discuss these and other charitable giving strategies with you and your advisors. Please keep in mind that we do not provide tax advice.
DJCF/SWCF Year-End Deadlines
December 23 at 5 PM – Deadline to recommend grants from DAFs.
December 30 at 4 PM – Deadline to make in-person contributions to funds.
December 31 – Last day to receive gifts of stock in our account. Note that stock transfer times vary. Contact your broker to ensure timely handling of your donation.
There are two ways to donate stock:
Through Donate Stock:
• DJCF/SWCF’s Donate Stock page enables you to contribute stock from your brokerage directly to your DAF through a secure portal, making the gifting process fast, safe, and easy.
• https://donatestock.com/dallas-jewish-community-foundation
By Manual Transfer (two steps):
• Instruct your broker to transfer stock to the Dallas Jewish Community Foundation’s brokerage account.
Firm: Morgan Stanley
DTC #: 0015
Account #: 048-024268
• Ask your broker to notify Jerry Blair – jblair@djcf.org or 972-645-1018 or Cynthia Hendricks – chendricks@djcf.org or 972-645-1019 to expect the transfer. Include your name, the stock name, the number of shares, and the expected date of transfer.
Credit card donations can be made at www.djcf.org or www.southwestcf.org. These are deductible in the year the charge is made, not paid.
Mailed donations must be postmarked on December 31 or earlier to be recorded for 2024, regardless of the check’s date. Make checks payable to “Dallas Jewish Community Foundation” or “Southwest Community Foundation,” and include the fund name in the memo line.
DJCF/SWCF’s EIN is 75-2836123.
