704-593-9695 david@davidrayecpa.com

We are reaching the end of 2020 and what a year it has been! The coronavirus pandemic has altered life for everyone and continues to impact us as we look forward to the new year. As you can imagine, many experts are predicting that charitable donations will be down in 2020 compared to previous years. At the same time, the need for charity is rising as so many people have been faced with economic dislocation caused by the pandemic.

In light of the current circumstances, I encourage everyone who is able to give generously this holiday season. There are many reasons to give: compassion for others, religious convictions, and a sense of duty but, as a good tax accountant, I want to highlight another very good reason: the tax deduction.

There are many ways to give but I want to highlight two avenues of giving that yield a return in lower taxes: the giving of appreciated stock and the donor-advised fund. Despite the economic fallout that has been experienced this year, the stock market has risen to near record highs. As a result, you may have stocks in your portfolio that are ripe for the picking. By donating these shares to your favorite charity, you will avoid taxation on the capital gain and receive a tax deduction for the full fair market value of the shares.

A donor-advised fund is simply an account that can be set up by anyone that is used for charitable giving purposes. All amounts contributed to the fund are tax deductible as a charitable contribution and earnings grow tax-free. Also, you may choose to send money from the fund to charities now or wait to a later date. It is kind of like having your own mini-foundation with none of the hassles and reporting requirements of a private foundation. For more information about donor-advised funds, please see my website and tax blog at http://www.davidrayecpa.com/donor-advised-funds/.

We are committed to serving your tax preparation and tax planning needs. If you have questions or need clarifications about either of these charitable vehicles, please do not hesitate to contact our office. Have a great holiday season and I wish you the best for the new year!