PLAN YOUR YEAR-END GIVING WITH TPF!
As we enter the last quarter of 2021, Turkish Philanthropy Funds would like to assist you with your year-end giving and grant-making with the best possible service. We encourage you to plan ahead to meet tax year deadlines that apply for giving in 2021.
Give now — decide later with a donor-advised fund. If you are not sure what cause to support, you may want to consider opening a donor-advised fund, which lets you get a tax deduction in the year you make the gift and then decide on which charities to support later. New donor-advised funds can be established by 12 Noon Thursday, December 30.
Please keep these important dates in mind to ensure your year-end gifts qualify for a charitable income tax deduction in the 2021 tax year:
- Checks sent via the U.S. Postal Service to the TPF office must be postmarked on or before December 31, 2021.
- Checks sent via carriers such as FedEx, UPS and DHL must be physically received at the TPF office on or before Thursday, December 30, 2021.
- Gifts of appreciated stock and wire transfers of cash should be made by Thursday, December 23, 2021. Please note that transfers of mutual funds may take additional time so early notification of these gifts will help ensure a smooth transfer. Contact Senay Ataselim-Yilmaz at [email protected] or call 646.530.8988 for assistance with stock gifts and wire transfers.
- Online contributions may be made until December 31, 2021.
- Real estate gifts must-have title transferred on or before Thursday, December 23, 2021.
Below you will see some recommendations and suggestions for your year-end giving.
Year-end grant recommendations
Donor-advised fund holders may wish to recommend grants as part of year-end giving or as holiday contributions. In order for nonprofit recipients to receive grants in 2021, recommendations should be made by Friday, December 10, 2021, as long as the non-profit is a TPF partner in Turkey or a tax-exempt organization in the United States. Donor-advised grant recommendations could be made by logging into your account online. Please note that the timing of donor-advised grants has no effect on your 2021 charitable income tax deductions since, for tax purposes, your charitable contribution was deemed completed at the time it was contributed to your donor-advised fund.
Give in honor of a loved one
While making an impact for our community in an area that is important to you or your honorees, such as the environment, education, arts, women and girls, children, and youth you can make your gift in honor of a loved one. Learn about current Donor Opportunities.
This year you can continue to take advantage of the two provisions made possible with the CARES act. Congress extended the write-off.
- A $300 for individuals or $600 for married couples filing together above the line income tax deduction for charitable gifts, which can be taken without itemizing. This is an increase, as prior to the CARES Act, taxpayers who take the standard deduction cannot get a deduction for charitable gifts. This is referred to as the “universal deduction” and is an above-the-line deduction.
- Donations must be in cash. This does not apply to contributions of property, marketable securities, real property, or otherwise.
- The donation must be to TPF. Donations to your donor-advised funds at TPF will not qualify.
- Tax-deductibility of gifts of cash is 100% of adjusted gross income (AGI) for 2021 – versus 60% of AGI in the past. The requirements for deductibility up to 100% of AGI:
- Donations must be in cash.
- Donations must be made to TPF (not to your donor-advised fund at TPF).
- Donations must be made during 2021.
If a donor gives more than 100% of their adjusted gross income, the donor may carry forward excess deductions for up to five subsequent tax years; though, the enhanced deductibility is set to expire after 2021.
Qualified Charitable Distributions from IRA
Congress has made the IRA charitable rollover permanent. You can roll over up to $100,000 from an IRA account directly to TPF without recognizing the assets transferred to TPF as income. You or your spouse can each give up to $100,000 from your IRA accounts to TPF to benefit your favorite nonprofits. Gifts made from your IRA are not reportable as taxable income and qualify toward your required minimum distribution (RMD), which can lower your income and taxes. To qualify:
- You must be 70½ or older at the time of your gift. If you reached age 701/2 in 2019, 2021 will be the first year you are required to take RMD. If you have reached age 72 on July 1, 2021, you must take your first RMD (for 2021) by April 1, 2022, with subsequent RMDs on December 31st annually thereafter.
- The transfer must go directly from your IRA to TPF.
Direct gifts to TPF from your IRA can:
- Be an easy and convenient way to make a gift from one of your major assets.
- Be excluded from your gross income: a tax-free rollover.
- Count toward your required minimum distribution.
Please note that a distribution to a donor-advised fund does not qualify for this special treatment. Please contact Senay Ataselim-Yilmaz at 646.530.8988 or [email protected] if you’d like to contribute IRA assets.
Consider Donating Appreciated Stock at the End of the Year
If your investment portfolio has prospered, you may want to consider making some of your year-end gifts with appreciated stock. You can achieve a greater impact by donating long-term appreciated securities. Compared to donating cash, or selling your appreciated securities, and contributing the after-tax proceeds, you may be able to automatically increase your gift value and increase your tax deduction.
How does it work?
It’s simple and easy.
Consider what stock has grown in value since you bought it.
An appreciated stock that is contributed to TPF is exempt from capital gains taxes. If you sold the stock and used the proceeds to write a check for your gift, you would potentially be liable for capital gains tax. When you claim a charitable tax deduction for your gift, the full fair market value of the appreciated stock on the transfer date is your gift amount.
An illustration of the value you would realize if you donated your appreciated stock to TPF appears below. (Note: To bypass long-term capital gains, you need to have owned the stock you select for gifting at least 366 days)
The original cost of the stock: $50,000
Potential federal long-term capital gains rate: 20%
The current value of the stock: $150,000
|Sell stock and donate proceeds||Donate stock to TPF|
|Long-Term Capital Gains Tax||$20,000||$0|
The additional amount dedicated to the nonprofit organization is an average of $20K (the value of the capital gains tax).
The value to you is a higher tax deduction and a greater charitable gift.
What should I do to take advantage of this opportunity?
- Contact your broker. Every brokerage firm has a slightly different requirement. Make sure you check their end-of-year deadlines to make sure your gift transfers before the end of December 23, 2021.
- Notify TPF so we are aware of the pending transfer and identify where the funds should be directed. Please contact Senay Ataselim-Yilmaz at [email protected] who will provide you with a stock transfer instructions document to share with your broker.
Download our Stock Transfer Instructions.
Plan your giving
Working with a philanthropic advisor at TPF gives you access to our knowledge of the nonprofit community in Turkey and opportunities to make a difference in ways that matter to you. We can also help you think strategically about the tools you use to give today or through your estate.
Note: This information is for educational purposes only and is not intended to be legal or financial advice. Please contact your own professional advisor for individual financial and legal advice.