What is charitable planning? Shortly after enactment of the federal income tax laws, Congress passed additional laws allowing a reduction in those taxes based on the amount given to qualified charitable institutions and organizations. This amounts to "voluntary" taxation through philanthropy.
The feeling that one receives when giving to others is a special gift of its own. With careful consideration for how you decide to donate money to various charities, you can facilitate many positive effects, not only for your philosophy and values, but for your finances as well. If you are considering charitable planning, discuss your plans for making gifts with an attorney, as in many instances it can reduce your income taxes and maximize your income.
The attorneys at Gregorek and Associates can assist you with charitable planning. Common topics include:
The following is an example of how we can help make the most of your charitable donation:
You give property to a qualified charity. That property is sold and converted into an income-producing asset for you, with no capital gains taxes owed on the sale transaction. The new assets provide you with an immediate tax deduction and can increase income for life. That income enhances your lifestyle.
Any reduction in the size of your estate due to significant gifting can be offset by one of a number of wealth transfer tools funded by the benefits received above.
These types of trusts distribute a fixed percentage of the value of their assets to a non-charitable beneficiary over a period of time. At the end of this designated time, whatever funds remain are distributed.
Similar to the unitrust, this type of trust dispenses a fixed amount of income each year to a specified beneficiary. Upon the donor's death, the remainder of the trust is transferred to the charity.
A charitable trust is an irrevocable trust established for charitable purposes.
These are funds managed by a third party on behalf of an organization, family, or individual.
Supporting organizations are similar to public charities, with some minor differentiators related to tax deductions.
These organizations are established by an individual, a family or a group of individuals, for a philanthropic purpose.
A public foundation is a type of non-profit organization that donates funds to affiliated charities. They may also provide the sole source of funding for their own charitable activities.
Gregorek and Associates, PLLC can assist charities and not-for-profits with this area of tax law. The 501(c)(3) tax exemption applies to organizations operated exclusively for religious, charitable, scientific, educational, or arts-related purposes.
We can't be sure what lies beyond the horizon. Still we charge ahead, realizing that we will encounter both calm waters and stormy seas. Gregorek and Associates, PLLC can help you navigate your way through complicated financial, legal and tax-related situations safely and securely. Contact Gregorek and Associates today.
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