8/22: Charitable Giving Season

So, you know, a simple way that I'll think about this, you know, talking through how things can get maximized, you know, let's kind of start with a thought concept on this.

So, you know, we call this the $10,000 test.

So, you know, you think about it, two neighbors each give $10,000 to the same charity.

One writes a check and say another is over you know, at any age, I guess, one gives appreciated stock.

So same gift, but very different tax outcomes to think through on that.

You know, if you think about it, the $10,000 check, those are your hardest earned dollars to get, by and large, right? I mean, it's after tax, it's sitting in your bank accounts.

You know, you've already paid any tax liability on that.

Now, say the $10,000 stock that you gave, say that had a basis of $2,000 on there, right? You hit a home run on a position.

It grew from $2,000 to $10,000.

That $8,000 profit, you haven't paid tax on that yet.

So if you held it long term, you might have capital gains rates, which could be 15% to 20%.

If you've got a surcharge on that, you live in Minnesota, you've got ordinary income tax on that as well.

You've never paid that tax.

If you give that stock directly to a nonprofit, you never do.

The charity doesn't pay tax, nor do you.

So that's a huge, huge difference right there.

I mean, that's a perfect, classic, very easy example of how to leverage.

Yeah, that's a very simple way to leverage that.

And, you know, it's you at the end of the day, you're happy because you gave $10,000 away.

But think, you know, just that size dollar value, how much you may have saved in taxes, you know.

And so that can be big.

You know, you think on the different side.

someone who's over 70 and a half.

And in the same scenario, you had the option of writing that check.

You could give those dollars or you've got an IRA.