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Making the most out of your charitable gift

March 6, 2020

We believe in giving back with both our time and resources. In fact, ‘giving’ is one of our core principles and we strongly believe in paying it forward. Over the years, we’ve found alignment in this with many of our clients and we strive to help them make the most of their charitable donations.

Are you philanthropic? Do you give to your church, a hospital, school or another organization that is operated for charitable purposes? Here are a couple of ways your kindness can benefit both you and your charity of choice:

  • Low basis stock – If you have low cost basis investments, give the investment (or part of it) to a charity. The charity doesn’t pay taxes on the gain of the investment and neither do you. In addition, if you itemize your tax deductions, this may count as a tax deduction. However, be sure to give the investment itself to the charity instead of selling it first then giving the cash to the charity.
  • Required minimum distributions – Are you of the age required to take a distribution out of your retirement account? If so, you can have your retirement account pay the charity directly and you will not need to count the amount of the distribution as income for the year. Again, be sure that the retirement account pays the charity directly and that the distribution never touches your account.

These are two ways to give that are more tax friendly than giving cash directly. However, keep in mind there are limitations on how much can be deducted from your taxes but you may also be able to carry it forward. Be sure to talk to a tax professional or financial planner before finalizing the donation to see if the situation is right for you and remember, you can always reach out to our affiliate, Collins Consulting Services for tax advice, or to me directly for holistic planning needs.

Contact us at 217.935.2148 about any of your current retirement or investment questions or needs, and we will be happy to answer them to keep you and your family on the path to generational prosperity.

Matt Riley was named Fiduciary Officer and VP for First National Bank and Trust Company in December 2018, helping clients to meet their prosperity goals through investment and estate planning. Prior to joining FNBT, Matt had risk and compliance analysis experience at State Farm Bank in Bloomington, Ill. Matt is a proud Illinois State University Alumni, receiving his B.S. in Finance with an emphasis in Financial Planning. He has continued his education journey, earning other designations including the Chartered Financial Consultant designation. In addition to his bank service, Matt became a member of the Clinton Rotary Club in April of 2019 and became a board member for the Warner Hospital & Health Services Foundation in May of 2019.

About First National Bank and Trust Co: First National Bank & Trust Company is a community bank located in Clinton, Illinois. Dedicated to community prosperity, the bank was chartered in 1872 under the name DeWitt County National Bank. The name was changed First National Bank and Trust Company in 1974, and was acquired by TS Banking Group in 2017. With $186 million in assets, First National Bank is dedicated to community reinvestment and gives 10% of its net income back to the community. For more information visit firstnbtc.com.