The recent 2018 tax law changes may have changed how giving to Shephills is treated tax wise. This means potential tax savings for you while supporting God’s work being done through the ministry of Shepherd of the Hills Lutheran Church.
Giving Opportunity #1 - The"Qualified Charitable Distribution or QCD" (RMD suspended for 2020 year)
If you are over 70 1/2 years of age and have a traditional type IRA or inherited IRA, you must generally start receiving distributions (called "Required Minimum Distribution or RMD") that may raise your income subject to taxation. A more favorable opportunity may exist by designating your RMD distribution directly to Shephills. This is called the "Qualified Charitable Distribution or QCD". Up to $100,000 individually or $200,000 RMD per jointly filing couple may not be included as income for the QCD if the IRA custodians ends the gift directly to Shephills since Shephills is a qualified charitable organization (501(c)3) organization.
For example, if you are receiving a RMD from your IRA and are giving to Shephills separately, your gift may or may not qualify (or be limited) for a charitable deduction on your tax return and the RMD is likely included in your adjusted gross income (AGI) subject to your tax rate. By using the QCD gift, the QCD amount may not be included in your AGI and not subject to taxation.
More information about the QCD is available in IRS publication 590b. This description is not intended to provide financial or tax advice so please consult with your IRA custodian and tax professional for financial advice and further information.
For setting up the QCD funding to Shephills, please contact the church finance office - email@example.com or call 512-327-3370.
Giving Opportunity #2 - The"Gifting of Appreciated Stock to ShepHills"
When you are considering your gift to Shephills, one of the most effective means of tax savings available is with the "Gift of Appreciated Stock", especially with the recent 2018 tax law changes. When you donate qualified appreciated stock (generally stock held for at least one year), you may be able to deduct as a charitable deduction the fair market value (FMV) of the stock (even though you may have paid substantially less when purchased) and not be subject to the capital gains tax for stock gift.
For example, if you gifted $10,000 FMV qualified stock to Shephills, assuming a 35% tax rate, you may be able to realize up to $3500 of tax savings and not pay capital gains tax on the stock gift. If instead, you sold the stock and donated the proceeds, you would likely be assessed a capital gains tax on the FMV less your cost basis.
To be included in the 2020 tax year, the gift needs to be transferred or stock certificate(s) postmarked by December 31, 2020.
More information about gifting qualified appreciated stock is available in IRS publication 526. This description is not intended to provide financial or tax advice so please consult with your investment and tax professional for financial advice and further information.
For setting up the transfer of stock to Shephills, please contact the church finance office - firstname.lastname@example.org or call 512-327-3370.