Tax Tips to Benefit You in 2024!

See transcript below.

The following has been edited for clarity and length.

Beth: Welcome to Maximizing Your Year-End Giving, where we will explore unique ways for you to give to your favorite charities in this giving season. 30% of annual giving occurs in December. That means it’s a busy time of year for your giving advisors. My name is Beth Robison, and I’m the Development Director for Cincinnati Green Umbrella. Green Umbrella is a non-profit working to address climate change and to help build a more resilient, equitable, and thriving future. I’m excited today to be joined by two experts in charitable giving to talk about ways to give for you to consider this giving season. Leah Bobby is the Senior Philanthropic Strategies Advisor for the Greater Cincinnati Foundation, where she works collaboratively with individuals and their professional advisors to help them achieve maximum philanthropic impact. Welcome, Leah.

Leah: Thank you. 

Beth: Logan Holman is an experienced certified public accountant who specializes in individual tax. After nearly a decade with traditional accounting firms, working with affluent families and business owners, she has co-founded her own tax company, Vivify. Vivify brings tax services to the everyday taxpayer. Welcome, Logan.

Logan: Hi, Beth. Thank you. 

Beth: Before we begin, I want to clarify that while I’m with Green Umbrella, our discussion today pertains to charitable giving for any 501(c)(3) organization. And I want to say that I’m looking forward to chatting with both of you because this time of year I do get a lot of questions from donors about unique ways to give, and I thought having this conversation today would be a great way for us to explore some of those questions and do a little bit of a deeper dive. Shall we dig in?

Logan: Yes, let’s do it.

Leah: Sounds good.

Beth: With the growth in stocks and the good market we’ve had since the end of 2022, donors are interested in how they can take advantage of that stock growth in terms of their charitable giving. Do you have any ideas for that?

Logan: I’ll take this one, Leah. There’s a way that you can gift or donate appreciated stock without actually having to sell and generate that capital gain on your tax return. How this works is you buy a stock, let’s say you spend $100 on it. Time passes, now it’s worth $1,000. You have that large gain, and you want to be able to help an organization like Green Umbrella. Typically you might think, “Okay, I have to sell this stock and report a $900 capital gain on my tax return. I pay tax on the gain and then that leftover cash, I’ll give to the charity.” You can actually skip the steps in between and make a greater impact with that by just taking that stock that’s worth $1,000 and transferring it directly to the organization. 

Beth: Oh, wow. 

Logan: This is great because your taxable income stays down. You’re not paying that capital gains tax, and the organization doesn’t have to pay the capital gains tax either. So you’re just avoiding that altogether. And even though I only paid $100 for that stock years ago, this year I’m getting a full tax deduction for the fair market value. I’m getting a $1,000 deduction while donating to that charity. This is a great time to capitalize on those appreciated stocks.

Leah: I love that, Logan, so much. At GCF (Greater Cincinnati Foundation), we see a lot of folks who choose to utilize a gift of appreciated stock by creating what is called a donor-advised fund. This is a vehicle that is becoming popular for folks, more and more nonprofits are seeing gifts come through a donor-advised fund. This is great because a lot of folks can choose to frontload their giving by making one big gift that can then be granted to as many organizations as you please over the years, and you can really have a greater tax impact, especially in that one taxable event that you may have this year or next year. You can receive just one acknowledgment letter for your taxes, which is really nice for getting organized. 

Logan: And CPAs love that. 

Leah: As long as you grant to a 501(c)(3 with very few limitations, that is doable. A donor-advised fund is great because money continues to grow tax-free, which increases your giving power, which I’m sure you (Logan) also love as the accountant. This is really a great way to involve the entire family, especially if you’re getting the kids or grandkids involved in giving. You can do that together by making decisions of giving from your donor-advised fund.

Beth: Another question is from donors who have assets outside of stocks that they want to give. How can they do that strategically?

Logan: That’s another good question. A lot of times retirees have a lot of their net worth or their assets in their retirement vehicles, like their IRA. Something that’s relatively new is called a qualified charitable distribution (QCD). You have to be at least 70 and a half, but once you reach that age, you can transfer assets, stocks, whatever’s in your IRA, you can transfer it from the IRA directly to the charity. What that means is you’re not getting a tax deduction, but it’s completely avoiding your taxable income altogether. 

Let’s say you take your required minimum distribution is $30,000. $5,000 of that you want to go to Green Umbrella. You’re only going to show $25,000 as income on your tax return. This obviously saves tax. And the other really cool thing about that is you’ll be lowering your taxable income even if you don’t itemize your deduction. With the higher standard deduction limitations, a lot of people now haven’t been able to utilize the tax advantages of giving. With a QCD, even if you take the standard deduction, you get this tax benefit. That’s a really good way to give if you don’t have a lot of cash on hand. 

Beth: Okay, this is our final question of the day. Green Umbrella also has a lot of donors who own real estate and property. Can they use donor-advised funds and other giving vehicles to be used for more complex assets like those?

Leah: Oh, definitely, Beth. In addition to stocks, like we’ve been talking about a little earlier, you can also gift real estate, shares of privately owned businesses, and, really, the sky’s the limit when it comes to giving. There’s a lot of giving vehicles that can accommodate those more complex assets. I know at GCF, we see that more and more these days, and we always say cash is NOT king when you want to give. It’s something to think about, especially as you talk to your financial advisors. When you go to folks like Logan over at Vivify, they’ll be able to look at your full financial picture and make a decision that’s right for you and the impact you want to have on the community.

Logan: Yeah, I do reiterate what Leah said about talking to your personal advisors because they’re going to know your situation better. And they can help you brainstorm about some of what you’ve learned today, certain goals that you have for your own financial situation, and how to best utilize your gift to the organization.

Beth: I do think there’s a lot of value in that personal relationship, where they start to understand what your values are and what your priorities are for giving. They often know of ways to give that you might not be aware of. And then, of course, they can certainly help you with the tax advantages and all the different ways to give. 

Leah: Absolutely. 

Beth: Thank you both so much for sharing and giving us all these insights today. End-of-year giving is a great way to ensure that your priorities for our community are realized. I’m hoping that this 2024 giving season is going to be a really exciting one. If you all listening today have any questions, comments, or ideas for future collaborations like this, you can reach out to me and we can see about getting those on the schedule. I want to thank you both for helping me out with this today, and happy giving to everyone in 2024.

Logan: Thank you so much, Beth.

Leah: Thank you so much.

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Beth Robeson is the Development Director for Green Umbrella. As Greater Cincinnati’s Regional Climate Collaborative, Green Umbrella leads a network of people, organizations, and governments committed to taking decisive action in the face of climate change. Impacting over 2.2 million residents throughout the region, Green Umbrella helps communities become more climate resilient and equitable, and work collectively to decrease the region’s emissions. 

Leah Bobby, CAP, CFRE, is the Senior Philanthropic Strategies Advisor for the Greater Cincinnati Foundation (GCF). Greater Cincinnati Foundation’s mission is to connect generous people with trusted nonprofits to create a vibrant tri-state region where every person has a fair opportunity to thrive. When you partner with GCF to achieve your charitable goals, you can look forward to collaborating with a multidisciplinary team that has a deep commitment to the Tri-State. 

Logan Holman, CPA, is the Co-Founder of Vivify, a female-owned team with a breadth of experience dedicated to making tax season approachable. Their mission is to break away from traditional norms and design an experience that alleviates the stress and confusion surrounding taxes. Vivify empowers individuals to navigate their taxes with ease while focusing on building wealth and achieving their financial goals.