Leave a Legacy

There are several ways to potentially reduce your current income tax or estate tax. We’re grateful to our friends at Cornerstone Wealth Strategies for explaining a few of the different ways. Click the categories below to learn more about maximizing your giving.

Pecuniary Bequest
“I give the ABC Charity of Richland, Washington the sum of $10,000.”

Fractional Bequest
“I give the ABC Charity of Richland, Washington 10% of my residuary estate.”

Fractional Formula
“I give the ABC Charity of Richland, Washington that portion of my estate that would otherwise be subject to the Washington State Estate Tax.”

Charitable Remainder Trust
“I give $500,000 to a Charitable Remainder Trust with a stream of income of $25,000 a year to my son for 20 years and at the end of the 20 years, the remainder goes to the ABC Charity of Richland, Washington.”

Write a Check or Give Cash

Make a Qualified Charitable Distribution
Utilize your IRA to directly transfer your Required Minimum Distribution (RMD) to a charity. Such a distribution excludes the amount donated from taxable income and still allows you to claim the standard deduction.

Give Appreciated Assets
By gifting capital assets like, stock or land or buildings that have a gain, the result is a charitable deduction for the fair market value of the gift, plus there is no need to recognize the capital gain from the sale.

Use a Donor Advised Fund
By contributing several years of giving (say 3 years’ worth of giving) to a DAF, a taxpayer can claim a larger deduction in the year of the gift but still spread the gift to recipient charities over the same 3 year period. A DAF contribution is especially enticing for individuals that experience high income years (like the sale of a business or an inheritance).

Charitable Remainder Trust
As an example, a couple could set up a CRT by gifting $500,000 into the CRT and maintain an income stream of $25,000 a year for life. After life the remainder goes to charity. The couple would get an immediate tax deduction for the actuarially determined value of the gift.

Rehema Ministries DBA Rehema for Kids, LPL Financial and Cornerstone Wealth Strategies do not provide tax, legal or accounting advice. These are hypothetical examples and are not intended to provide, and should not be relied on for tax, legal or accounting advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor prior to engaging in any transaction.