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Generosity in the Story of Christmas

1 week ago By Evan Lange

Christmas is my favorite time of year. I love the joy and cheer, sweet treats, and the wonder in my children’s eyes when they come down the stairs on Christmas morning. But the thing I love most is the Christmas story! In Chip Ingram’s book, Genius of Generosity, he gives a beautiful picture of how true generosity is demonstrated in the Christmas story. To better explain this, let’s look at the six types of gifts given in the Christmas story. Gift of Treasure – The Wise Men As the leading astrologers of their time, the Magi studied the stars and…

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Advisor

Year-end checklist for Advisors

1 month ago By Evan Lange

The leaves and the weather are changing, so that means it is time to start year-end planning sessions with your clients. Take some extra time this fall to consider some of these simple year-end charitable and tax-planning strategies: Bunch a bunch Because of the 2017 tax law changes, several clients may not have enough itemized deductions to surpass the 2019 standard deduction threshold ($12,200 for individuals and $24,400 for married couples filing jointly). However, clients can maximize their deductions by doubling or tripling up charitable contributions one year and skipping the next year(s). This strategy is referred to as “bunching”…

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Advisor

The History of Donor Advised Funds

2 months ago By Evan Lange

I love studying history. From recent events to ancient biblical history, it is important to know how we have arrived at where we are today. Therefore, I would like to provide a little history of the donor advised fund (DAF). Many may know the charitable and tax benefits to using DAF, but DAFs are still underutilized by many. This is likely because DAFs are still relatively young from a historical perspective. Here is a brief history: In 1913, Congress passed the Revenue Act which exempted charitable organizations from paying federal taxes. In 1914, the world’s first community foundation was established…

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Advisor

Warren Buffett’s Missed Opportunity

4 months ago By Evan Lange

When it comes to charitable giving, it often seems like the world’s wealthiest individuals have it figured out. With so many assets to manage, these donors know how to support charitable causes while capitalizing on the tax benefits of the giving process, right? Unfortunately, not all get it right. In July, an article in Forbes announced that Warren Buffett is donating $3.6 billion of his Berkshire Hathaway stock to charity. It also offered advice on how other donors could maximize their giving by following in Buffett’s footsteps. The problem? Buffett is primarily giving the stock to private foundations. Consequently, he is missing out on significant tax benefits he could receive if he utilized a donor advised fund (DAF) instead. There are important differences, when it comes to tax benefits, that all donors and advisors should consider.

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Advisor

Six Benefits of Using a Donor Advised Fund

5 months ago By Evan Lange

Most financial advisors, attorneys, and CPAs know the benefits of using a donor advised fund (DAF). However, DAFs are still often underutilized by the public. While many may have used DAFs for large net worth clients a few decades ago, DAFs are still a useful tool which many people can use to help grow their generosity. Here is a short list you can use to show clients the benefits of using a DAF to grow their giving with less hassle: Anyone can open a DAF online in a matter of minutes, and The Signatry requires no minimum deposit or balance upon starting a fund.…

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Advisor

Donor Advised Fund or Private Foundation?

6 months ago By Joe Williams

Two of the most popular charitable vehicles are donor advised funds and private foundations, but which is best to use in your generosity journey?  That depends. Nearly $70 billion in grants to charity came through private foundations and donor advised funds (DAFs) in 2017. Understanding the differences between these two vehicles is crucial in deciding which is most appropriate for you and your family’s giving. Here are eight key comparisons to consider: Start-Up Cost: DAFs: Can be established immediately at a low or no cost. Most sponsors require an initial minimum contribution of $5,000 or more, but you can open…

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Advisor

3 Questions to Uncover Attitudes About Money

7 months ago By Evan Lange

Determining a client’s view of money is helpful when creating a financial strategy. It will help determine where and what to invest. Here are three questions to help you uncover your clients’ attitude about money. What is your story? This broad question allows clients to open up about their experiences and enable you to discover their background, goals, and what they are priorities are. Not everyone will be willing to open up at first pass, but with engaged listening and interaction, this conversation can lead you to a deeper understanding of your clients’ core values. What are you passionate about?…

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Advisor

Spring, Basketball, and Taxes

8 months ago By Evan Lange

Happy Spring! I love this time of year because the weather is getting warmer, lots of good basketball games, and it is tax time. Yes, I get excited about tax season because we finally find out how year-end tax planning strategies worked.  This is especially true because the 2018 tax year applied the new 2017 tax reform laws. Based on the phone calls I have received this Spring; a lot of people are feeling the effects of the changes.  Below is a recap of these conversations and some potential solutions moving forward: Doubled Standard Deduction. Only about 10% of all households in the U.S. will itemize their tax deductions for the 2018 tax year. The standard deduction (increased to $24,000 for married and $12,000 for individual), meant that many households that itemized deductions, including charitable giving, will no longer need to itemize. Unfortunately, several households left tax savings on the table, because they failed to plan properly. SALT Deduction Capped. State and local taxes (SALT) used to be fully deductible, but now SALT deductions are now capped at $10,000. This has affected several middle-income earners. Charitable Deduction Increases. Taxpayers that itemize may now deduct up to 60% of their adjusted gross income each year in charitable contributions; a 10% increase from 2017. Taxpayers may carry forward any amount that exceeds this limit up to five years after the gift is made. Taxpayers may still deduct up to 30% of their AGI using gifts non-cash assets to charity. The most noticeable effect of the 2017 tax reform, from a charitable giving standpoint, most households will not receive a tax benefit (in the form of a deduction) from their charitable gifts in 2018. In my opinion, this has occurred because of the increased standard deduction and the cap on the SALT deduction. For 2019, make sure that your clients consider two easy tax-saving strategies: Bunching charitable gifts one year using a donor advised fund. By combining multiple years of charitable giving in 2019, clients will be able to itemize their deductions for 2019. In the subsequent years, the client could give to charity from their DAF and then take the standard deduction for those years. Click here to learn more about bunching. Give assets! While several itemized deductions have been eliminated, the charitable deduction remained intact, including donating capital assets (assets that would be subject to long-term capital gains tax). When capital assets are given the donor receives a fair market value income tax deduction for the donation, and the capital gains that would have been paid will likely be avoided entirely by the charity. The vast majority of all charitable giving in the U.S. are cash gifts, but the real tax benefit is by donating capital assets!  Make sure your clients do it!

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Advisor

Having the Conversation on Asset Giving

9 months ago By Evan Lange

Many advisors find that being involved with their client’s giving is one of the most meaningful aspects of their work. Philanthropy is an easy way to build deeper relationships with clients. It not only paves the way for a lasting relationship but offers inroads into the next generation of clients and future givers. When your client is ready for the conversation on giving, discussing their assets will play a vital role in the discussion. The following three points offer an outline that will aid in the conversation. Identify which assets to contribute Whether your client is motivated by philanthropic or tax advantage goals, determining what types of assets they can gift is a crucial first step. The common types of assets that are generally gifted are cash, securities, real estate, or closely held business interest. All of these can be given through a donor advised fund. Timing of gift A recent article in Forbes states, “donating property that has appreciated in value, like stock, can result in a double benefit…not only can you deduct the fair market value of the property (so long as you’ve owned it for at least one year), you will avoid paying capital gains tax” Gift valuation guidelines are established in the current tax regulations. In general, the value of the gift is based on the type of asset and the date of contribution, which is typically the date the asset is delivered to the receiving organization. Gifting a complex asset can be a lengthy process. It is important to evaluate the timing of the gift to ensure it will benefit your client within the current tax year. Selecting a charity Deciding what organizations to support, is usually the most exciting part of the process for your client. For many donors, the organizations they choose often have personal meaning and speak to their experiences. By giving complex assets through The Signatry, donors can make grants to smaller nonprofits that would otherwise be unable to accept complex gifts. https://www.forbes.com/sites/kellyphillipserb/2018/12/11/14-tips-for-making-your-charitable-gift-tax-deductible-in-2018/#65eb5fb5f80c  

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