As we approach the end of 2024, Turkish Philanthropy Funds (TPF) is here to assist with your year-end giving and grant-making, ensuring you meet tax deadlines. We encourage early planning to maximize benefits.
Donor-Advised Fund (DAF) and Bunching Strategy
If you’re uncertain about which causes to support, consider opening a donor-advised fund (DAF) at TPF. This allows you to receive a tax deduction now and decide on charities later. A popular strategy is “bunching,” where you combine multiple years of donations into one, maximizing your deduction in 2024 while distributing grants over time. New DAFs can be opened by noon on Monday, December 30.
Qualified Charitable Distributions (QCD) from Your IRA
If you or your spouse are 70½ or older, each can direct up to $100,000 from your traditional IRA to TPF through a QCD. Starting at age 73, QCDs can offset required minimum distributions (RMD), lowering your taxable income. Remember, QCDs must go directly from your IRA to TPF and cannot be used for donor-advised funds.
In 2024, since you can now only claim a deduction up to 60% of your Adjusted Gross Income (AGI) if you itemize, the value of making a QCD has increased as the tax savings on the gifted funds can offset the lost deductions. QCDs are another area that require careful planning and should involve your advisors.
For more information, contact Pinar Ozyurek at 646.530.8988 or [email protected].
Donate Appreciated Stock
Consider donating appreciated stock for year-end gifts. You avoid capital gains tax and can claim a deduction for the stock’s full market value. By donating long-term appreciated securities, you can increase your gift’s value and your tax deduction. 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 |
Charitable Contributions/Deduction | $130,000 | $150,000 |
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.
To take advantage of this, contact your broker and make sure the transfer is completed by Friday, December 20. Notify TPF, and we will provide stock transfer instructions.
Important Year-End Deadlines
- Check Gifts: Postmarked by December 31, 2024, or physically received by December 30 for express carriers.
- Stock Gifts: Transfer by Friday, December 20, 2024.
- Wire Transfers: Initiate by Friday, December 27, 2024, to be received by December 30.
- Online Contributions: May be made until midnight on December 31, 2024.
- Real Estate Gifts: Transfer title by December 20, 2024.
For donor-advised fund holders, grant recommendations should be made by Friday, December 6, 2024, to ensure nonprofits receive grants this year. Donor-advised grant recommendations could be made by logging into your account online.
For further assistance, please contact TPF Philanthropy Director, Pinar Ozyurek at 646.530.8988 or [email protected].
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.