Charitable Giving Tips for the Holidays

December 17, 2010
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The holiday season coincides with the end of the tax year; therefore, many charities are asking for contributions. A recent Wall Street Journal article highlights some mistakes that people make when donating to charities during the holidays and suggests how to avoid them.
Giving on impulse can cause people to end up giving beyond their budgets, or cause them to forget charities they feel strongly about. People may end up giving to groups that do the best job of getting their attention. You can identify and focus on the groups that your family has worked with previously, or that you care about the most. Then you can create a giving budget, allocating funds to each major cause. Having a plan can allow you to turn down requests that do not fit within your plan.
People often give stock to charities. If you give away stock that you have held for less than a year, then you can only deduct what you paid for the stock and not its fair market value. This would be a problem if the stock has increased in value since you purchased it. On the other hand, donating stock that has declined in value does not help you taxwise, because you cannot lock in a capital loss to offset capital gains in your portfolio. Advisers suggest selling the stock first, claiming the capital loss, then donating cash to charity.
Individuals also make gifts of tangible personal property to charities. If you donate tangible personal property to a charity, then you can deduct its fair market value only if the charity’s mission directly relates to the property. For example, if you donate a valuable painting to your university, then you won’t get a big tax deduction unless your school showcases art as its primary mission. On the other hand, if you donate the painting to an art museum, then you would be more likely to be able to deduct the painting’s fair market value.
Be aware that some charities rent or sell lists of information such as the addresses and telephone numbers of their donors. This can leave you vulnerable to unwelcome solicitations. You should ensure that the charities have strict privacy policies before giving them information, and you should also be aware that you may have to specifically ask to be left off donor lists.
People often expect to receive a full deduction for donations to charity. If a donation results in a benefit to the donor, then the deduction becomes the amount of the donation less the benefit to the donor. This can come into play with tickets to fund-raising events. If you donate $1,000 to a charity for a concert ticket valued at $200, then your deduction is $800.
The holiday season is a good opportunity to satisfy your family’s desire to assist charities, as well as provide useful tax deductions. These tips should help you have the best of these two worlds.
The attorneys at Oast & Hook can assist families with their estate, financial, insurance, life care, veterans benefits, and special needs planning issues.

Ask Allie

O&H: Allie, last week you gave our readers some valuable information that veterinarians want pet families to know. Please give us the rest of these important tips.
Allie: Sure! Veterinarians know that many people like to use the Internet for information, but please use the Internet wisely. You can start with your veterinarian’s website, or ask your veterinarian for a website that is an authority on your pet’s condition. Please don’t try to diagnose your pet’s problem online. Next, medication and treatment can often be expensive, so be honest about what you can afford. You may also want to investigate health insurance for younger pets. The next tip is about pain relief; the field of pain relief for pets is well advanced, and pain relief can be simple and relatively inexpensive. Veterinarians advise you to demand pain relief for your pet when needed in order to provide your pets with the pain-free existence that all of us deserve. Next, practice prevention whenever possible because it’s better to prevent illness and disease than to endure the difficulty and expense of treatment. Regular exams, proper diet, and exercise can prevent or delay many conditions. Please ask your veterinarian about wellness care and preventive steps for your pet. Finally, before you get a pet, you may want to see your veterinarian first. Your veterinarian can tell you if the pet you are considering has predispositions to health issues and give you an idea whether the pet’s temperament is a good fit for your family and you. Many animals end up in shelters because they and the family were the wrong fit.
My friends at Oast & Hook want to be sure that all of our readers know about the book that my mom has recently published. It’s called “The Night Before Christmas at Tom Feline’s House: A Visit From Santa Claws,” and you can order it on www.amazon.com or on the Cat Fanciers’ Association website at www.cfainc.org. I’m honored that my mom asked me to write the forward to her book, and I hope that you enjoy it. That reminds me…time to go find her and play for a while after all of “our” hard work. See you next week!

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