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Charitable Giving – Irving, TX

Giving Back the Smart & Easy Way

Are you considering how you can incorporate charitable planning into your long-term financial plan? Choosing to give to those in need is an impactful way to share your success and selflessly contribute to someone else’s. However, knowing how much to give and how to do so in a tax-efficient manner can be difficult to identify. That’s where we come in. At Cadent Capital, our team is passionate about coming alongside our clients and creating a realistic path to achieving their goals, and charitable giving is a key component. Call us to schedule a consultation with a member of our team to learn how we take a calculated approach to determine your charitable giving strategy.

What Does Charitable Giving Mean to You?

Charitable giving looks different for every person. We encourage those with the desire to give to intentionally reflect on how they are best equipped to make an impact. This can include the giving of one’s money, time, or skillset. While one person might choose to support their charity of choice financially, another may volunteer their time, and another may use their talents or connections to benefit others. When it comes to financial giving, there are several creative options to consider that many are not aware of.

How Do I Make a Charitable Gift?

When choosing to make a substantial charitable gift, you may want to work with a wealth advisor who can explain and calculate the best solution to help ensure your money is used in the most impactful way. Not only are both your values and wishes heard and respected, but a knowledgeable advisor will bring in their experience with investments, taxes, and charitable transfers.

Significant charitable giving can generate tax benefits or even valuable income for you and your loved ones. Tax savings should not be the sole reason behind your desire to give, but if you are already planning to support charity, doing so in a tax efficient manner can lead to savings and other benefits.

What Are the Benefits?

While the positive feelings you experience in being able to help others is an important benefit to giving, there are other advantages depending on the type of charitable planning you and your wealth advisor at Cadent Capital, LLC agree upon:

  • Positively influence future generations
  • Lower your tax responsibility through various charitable deductions
  • Utilize overweight investments in your portfolio to migrate back to the target allocation
  • Build your family’s legacy

How Can I Give Impactfully?

If you’re looking for the most lucrative and beneficial ways to give, our team of professionals at Cadent Capital, LLC is here to recommend options based on your needs, values, and long-term goals. During a thorough consultation, we’ll go over your charitable giving goals so that you feel confident in the future of your financial plan.

A few of these solutions may include:

  • Retirement Plans – Direct required distributions to the charity of your choice to lower income tax liability, or name a charity as the beneficiary to your retirement plan, will, or living trust to preserve your estate tax liability.
  • Investment Gains – Gift appreciated securities directly to the charity to avoid taxes on the capital gains.
  • Business Ownership – Transfer a portion of your business ownership to the charity in anticipation of a sale to minimize your income and/or capital gains tax exposure.
  • Gifting of Real Estate – If you have a home, farm, or any other type of property, you can choose to gift these to your chosen charity while also maintaining the rights of the property while you are still living.
  • Charitable Lead Trust – By placing assets into a trust, you can choose for your charity to receive income each year or for a specific (fixed) period. Once this timeframe has passed, any remaining assets are transferred to denoted beneficiaries.
  • A Life Income Gift – This allows you to transfer property to your charity of choice while maintaining income interest. If the gift is only for a certain number of years, the remainder is allocated to the specific charity.
  • Donor Advised Fund – These accounts allow you to make a lump-sum charitable gift to the fund, and then distribute the proceeds via grants to charity at whatever pace you desire. The donation is complete for tax purposes when money is contributed to the Donor Advised Fund, so many find it beneficial to complete a larger gift during a high-income tax year and enjoy the flexibility around when the grants go to charity. Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes.

Any opinions are those of Cadent Capital and not necessarily those of Raymond James.  Changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

Charitable Giving FAQs

What is considered a charitable gift?

When it comes to the types of charitable gifts that merit a deduction from the Internal Revenue Service (IRS), there are only certain ones that apply, such as:

  • Those in which the person receiving the gift receives complete legal title and dominion, which is binding, resulting in the donor no longer possessing any power over the gift.
  • Those in which the donor establishes the final intention to deprive himself or herself of any title, authority, or control of a property.
  • The recipient of the gift accepts

To receive a deduction from the IRS for your charitable gift, it must be given to a charitable organization that is recognized by the IRS. It’s important to remember that not all tax-exempt organizations are recognized by the IRS as “charitable.”

Are there limitations to the income tax charitable deduction?

The specific amount is dependent on a few different factors such as the type of organization receiving the gift as well as the type of gift itself. It’s not uncommon for an individual’s deductible to be limited to 20, 30, or 50% of their adjusted gross income.

However, if the individual’s gift is more than the yearly deductible limit, the remaining deduction can be applied for up to five years.

Is it possible to place restrictions on my gift?

Yes, it is possible to place restrictions on your gift; however, you will need to discuss the legal components of such restrictions with the appropriate persons within the organization. How you decide to restrict the funds of a particular gift is up to you, but all federal and state laws must be factored in so that your charitable gift is used according to your intent.

When selecting a nonprofit organization, what should I look for?

Before choosing which nonprofit organization to support, you’ll want to determine which one is most important to you. Consider their values and mission, determine if you want your gift to benefit a local, national, or global organization, and decide how you want to distribute your gift. Do you want to help multiple organizations or give one large sum to a particular organization?

What can I look for to determine if the charity I want to support is trustworthy?

When it comes to charitable gifts, you want to make sure that the organization you support is trustworthy. After all, this is a valuable donation that you do not want to be mishandled. To ensure that your gift is going to the right place, you can visit charitynavigator.org – a website that makes it easy to evaluate your preferred charity. Using a distinct rating system that looks at the organization’s financial health, transparency, and accountability, this type of website can give you greater peace of mind before finalizing the details.

If you prefer to donate to a smaller or local charity, you are strongly encouraged to, as they may not have the substantial resources to rank as high on such a website.

When it comes to giving cash or securities, which is better?

Depending on who you talk to, one person might say cash, while another might say securities. The only way to know for sure is to schedule an appointment with your wealth advisor or tax professional. This meeting will help you to understand the various rules that must be followed when it comes to a tax deduction that is associated with a charitable gift. You’ll need to determine if the securities you have are higher or lower in value, for example.

When considering charitable gifts as part of your financial planning, it’s important to speak to the right professionals about creating a donor-advised fund. The team at Cadent Capital, LLC as well as various tax professionals can help explain how these funds work and which options to consider.

Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes.

Raymond James ands its advisors do not provide tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.