I’ll never forget the frantic phone call I received one year ago on December 31st. A donor had sold some assets during the year and had just figured out his tax consequences. He needed tax deductions, and he needed them now!
The problem was that he’d started so late in the game that it was too late to donate any publicly traded stock. It was also too late to donate any other assets. And worse, because he’d sold the assets without donating a portion first, the entire amount of his capital gains were locked in. His only option was to donate cash, and as the hours waned, he just didn’t have time to weigh the options. He ended up writing a mass of checks to charities he didn’t even know.
You can avoid this plight. Start your planning now.
Recently, I completed my own mid-year review of my taxes and my own giving. I discovered that I was on track in some areas but behind in others. The review allowed me to make some adjustments in my own giving, finding places where I wanted to give but had not done so.
So let me encourage you to do your own mid-year review, whether with your advisor, with your spouse, or on your own. Take a look at whether you have appreciated assets that make a great opportunity to donate and reduce capital gains. Look at your anticipated tax liabilities. Can they be reduced in favor of more giving? Are you selling an asset? A business? Real estate? Those are prime opportunities to reduce tax in favor of more giving.