ElderLaw News — The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News

ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President.

Charitable Giving Tips for the Holidays

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 tax wise, 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 The Estate Planning & Elder Law Firm, P.C. can assist families with their estate, financial, insurance, life care, veteran’s benefits, and special needs planning issues.

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The Estate Planning & Elder Law Firm, P.C. is an elder law firm. We represent older persons, disabled persons, their families, and their advocates. The practice of elder law includes estate planning, estate and trust administration, powers of attorney, advance medical directives, titling of assets and designations of beneficiaries, guardianships, conservatorships, and public entitlements such as Medicaid, Medicare, Social Security, and SSI, disability planning, income tax planning and preparation, care management, and fiduciary services. For more information about The Estate Planning & Elder Law Firm, P.C., please visit our website at http://www.chroniccareadvocacy.com.

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This newsletter is not intended as a substitute for legal counsel. While every precaution has been taken to make this newsletter accurate, we assume no responsibility for errors, omissions, or damages resulting from the use of the information in this newsletter. The Estate Planning & Elder Law Firm, P.C. thanks the law firm of Hook Law Center for their input to this newsletter.

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