Charitable Giving Options With Tax Benefits
- If you or a family member has reached the age of 70½ and has an IRA, you are required to take some of that money out each year. Up to $100,000 of this Required Minimum Distribution (RMD) may be donated to the Art Mission and Theater tax-free. By including money that would normally go to the government, giving in this manner adds significant dollar value to your donation.
- The simplest form of charitable giving through an estate would be naming the Art Mission and Theater as a beneficiary in your will. The amount you give won’t reduce your income taxes, but it could reduce your taxable estate, potentially increasing the amount you’ll be able to leave to your heirs.
- Another option you may not have considered is a Charitable Remainder Trust. A CRT is an irrevocable, tax-exempt trust in which you place assets to provide income for yourself during a specific period of time (i.e., your lifetime or a period not to exceed 20 years). After that, the remaining assets will be turned over to the charity of your choice. In many cases, there are no capital gains taxes on assets transferred to, and sold through, a charitable trust, and it has the potential to generate substantial income for the donor.
- Donating a retirement account is another straightforward and tax-effective way to support us. You simply designate the Art Mission and Theater as a beneficiary on your account. Because our 501(c)(3)charity is exempt from both income and estate taxes, it can receive 100% of the account’s value. You can then leave non-retirement assets, which don’t have the same income tax burden, to your children.
We are not qualified to provide detailed advice on tax matters, so we encourage you to discuss your options with a CPA and/or estate planner.