As the end of the year approaches, you may be looking for ways to lower 2019 taxes. With the stock market near record highs, you may also be sitting on significant unrealized capital gains. This may be the perfect time to turn your investments into tax deductions.
Her are two simple and often overlooked methods of accomplishing this.
Donation of appreciated stocks – Donations of appreciated stocks can be a tremendous tax saver. Here’s how it works: The appreciated stocks must be eligible for long term capital gain treatment which generally means they must be held for more than one year. If given directly to the charity, you can deduct the full fair market value of the stocks and avoid capital gains taxes on the appreciation.
Qualified Charitable Distributions – These are direct transfers from an IRA directly to a qualified charity. This tax break is only available to those age 70 ½ or older and is capped at an amount of $ 100,000 per individual per year. QCDs are not included in the individual’s taxable income making the distributions tax-free. There are two additional bonuses: QCDs can count toward the individual’s required minimum distributions and the donation can be made whether you are itemizing or not.
For more information about these and other tax saving moves, please contact my office at 704-887-5298 or [email protected].