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I often tell people that if it doesn’t bother your conscience or your pocketbook you’re probably not going to change.
When it comes to giving to a charity it is definitely true but if you ask the right questions of your tax professional you may get a little more out of your tax deductions to go along with your generosity. If you are already giving to a nonprofit, now might be a good time to ask about the benefits of managing your successful investments as part of a charitable giving plan.
For instance, have you ever taken advantage of donating your stocks to your preferred nonprofit? According to my friends in the investment business, this is absolutely the perfect time for people to donate appreciated securities. The stock market is near an all-time high and this time of year is typically a low for nonprofits to receive donations.
In most cases, a taxpayer can deduct full market value of the stock if they’ve had it for a year, will not have to deal with capital gains later and the charity can sell the stock without paying capital gain taxes. Truly a win-win scenario and there isn’t a better time in history to do so then now.
Another good example of giving is the vehicle donation. The good old days of donating your vehicle and getting the full market value of the car aren’t totally gone. There are some situations where you're permitted to claim the car's estimated market value. If the charity makes significant use of the vehicle or gives the vehicle to a person who needs transportation then you can make a claim on your taxes.
Right now, Feeding America, Kentucky’s Heartland needs a car or truck to help with food donations. A clean vehicle in good working order would not only make a big difference to this local charitable organization but also would be a benefit to you on your taxes. Not to mention getting it out of the driveway without the hassle of haggling with a prospective buyer.
I am just scratching the surface with these two ideas but now is a good time to talk to your own tax professional about how to make a difference in the life of a family and do a little better on your taxes. Making a donation plan and telling your financial professionals that you want to make the world a better place can lead to some good open discussions about the benefits of giving.
Whether you donate locally with a check, give from your IRA, share some stocks or look into charitable trusts you are helping make your community a better place to live.
Don Fulford is executive director of Feeding America, Kentucky's Heartland, a food bank serving 42 counties from its base in Elizabethtown. He can be reached at email@example.com.