Taking Full Advantage of Charitable Gifts

November 7, 2017

You should review your charitable giving to ensure that it is being done in the most tax-efficient manner. Charitable giving is an important form of estate planning. Gifts to charity are not (and never have been) subject to estate or gift tax. If you are planning to make a large gift, we should review its impact on your over-all tax liability and whether it may make sense to defer all or a portion of the gift to future years.

The IRS requires an appraisal of the fair market value of certain gifted assets. The IRS states that: “The donor may not be allowed to claim fair market value for the donated property if the contributed personal property is put to unrelated use by the charity, or has a claimed value of more than $5,000, and is sold, traded, or otherwise disposed of by the qualified organization during the year of the donation, and the organization has not made the required certification of exempt use as outlined on Form 8282, Part IV.” “Unrelated use” means “a use that is unrelated to the exempt purpose or function of the charitable organization. For example, if a painting contributed to an educational institution is used by that
organization for educational purposes by being placed in its library for display and study by art students the use is related. But if the painting is sold and the proceeds from the sale of that painting are used by the organization for educational purposes, the use is considered unrelated use.”

If you are contemplating making a gift this year of property that will require an appraisal (usually gifts of property with a value in excess of $5,000, other than publicly traded stock), we should start the process as soon as possible so that the appraisal is available before year end. Please give us a call to discuss.