By Chris Kelly
Exec. VP/General Counsel, Tennessee Baptist Foundation
’Tis the season — the season for celebrating our Savior, gathering with friends and family, looking for that perfect gift, and taking last-minute advantage of the charitable giving opportunities to Baptist causes within this calendar year. While I’ll admit that it is surprising that no one has ever written a Christmas song about charitable giving, it is important to consider whether you may lose some significant giving opportunities if you haven’t taken action by New Year’s Eve. These are just a few ideas to consider implementing before the big ball drops:
- Make a regular contribution. The easiest way to make a gift to your favorite Baptist cause is simply by writing a check or donating online. If your check is postmarked by Dec. 31 or if your online donation is processed by Dec. 31 (note that the time of day may be important), you may be able to take a charitable deduction for the gift (subject to some restrictions and qualifications).
- Give next year’s tithes and offerings this year. Depending on your tax situation, it might be advantageous to pay some of your 2017 gifts to your church in 2016 in order to offset a higher income you’ve earned this year. I’m sure your church would be happy to start the year with more resources at its disposal!
- Give gifts of appreciated assets. With the improved financial markets, many people now find themselves holding stocks, bonds, mutual funds, or real estate that has significantly increased in value. Selling these assets may create substantial capital gains for the owner. However, rather than increasing your tax burden, you can donate the appreciated asset to your church. The church gets the use of the full value of the gift (churches do not have to pay capital gains), and you get the charitable deduction based on the fair market value of the assets. Win-win!
- Make a charitable contribution from your IRA. For those saints who own IRAs and whose Christmases past started at least 70 and a half years ago, you may send all or a portion of your Required Minimum Distribution (RMD) to your favorite Baptist cause. The church gets the full use of the contribution (the church pays no income tax), while you get credit for satisfying your RMD with no accompanying income tax liability. Officially known as the “Qualified Charitable Distribution,” this technique requires that you follow very specific procedures. As with Black Friday shopping, you do not want to try to do this on your own, so be sure to contact your financial advisor on the details.
Remember, when the calendar rolls over to Jan. 1, you will lose the ability to take advantage of these strategies for 2016. If any of these ideas interest you, begin the process now (remember, your financial advisors and your church office are busy, too, this time of year) to make sure you allow plenty of time for the process to be completed by the year end.
Just like a snowflake, you are unique, and so is your tax situation, so check with your tax advisor before taking any of these actions. Please know that the Foundation is happy to help your church and/or you with any questions you might have and can even help facilitate these strategies. Take action now, so you’ll have time to work on your holiday lists, especially since some of those other lists have to be checked twice and maybe even three times.
From the Foundation, we wish you the happiest of Christmas seasons as we celebrate Immanuel!