Celebrate variety: Many assets make great gifts to charity When your client is getting ready to contribute to a fund at the FM Area Foundation or other charity, remind them not to reach for the checkbook automatically! Here are different (and typically more tax-savvy) options to consider. Marketable securities Gifts of long-term appreciated stock to a donor-advised or other type of fund at the FM Area Foundation is always one of the most tax-savvy ways to support favorite charitable causes because capital gains tax can be avoided. For example, gifts of publicly traded stock are easy to transfer to a fund. The team at the FM Area Foundation can provide you and your clients with transfer instructions to simplify the process. As is the case with a cash gift, the FM Area Foundation will provide a receipt for tax purposes, and the gift of stock will be valued at the shares’ fair market value on the date of transfer. When the FM Area Foundation sells the shares, the proceeds flow into the client’s fund without any reduction for capital gains taxes. The FM Area Foundation is a 501(c)(3) charitable organization and therefore does not pay income tax. That would not have been the case; however, if the client had sold the stock first and then transferred the proceeds to a fund at the FM Area Foundation, the client would owe capital gains tax on the sale. The capital gains hit can be significant, especially in cases where the client has held the stock a long time and it’s gone up significantly in value. Closely held business interests The FM Area Foundation team is happy to work with you and your client to explore how the client might give shares of a closely held business to a fund at the FM Area Foundation. Not only will transfers be eligible for a charitable deduction during the year of transfer (and at fair market value if the shares are held for more than one year), but these gifts could potentially reduce income tax burdens triggered upon a future business sale. Be sure to talk with our team before any potential sale is in the works; otherwise, you could lose out on tax benefits. Gifts of closely held business interests are powerful but can be tricky to administer. QCDs from IRAs As always, keep in mind that the Qualified Charitable Distribution (“QCD”) is a brilliant way to support charitable causes. If your client is over the age of 70 ½, the client can direct up to $105,000 (in 2024) from an IRA to certain charities, including a field-of-interest, designated, unrestricted, or scholarship fund at the FM Area Foundation. If your client is subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs. That means your
areafoundation.org
409 7th St S. Fargo, ND 58103