Overview

“You must pay taxes, but there's no law that says you gotta leave a tip". - Morgan Stanley Advertisement

Keeping giving motives in perspective, many people give regardless of any tax advantages.  If they are truly passionate about a cause; they give from the heart.  For them, the practice of charity has become an integral component of their very being; they have achieved the “Journey Beyond Self”.

Even so, tax, estate and creative planning ideals can be very important elements in a giving and gifting plan.  After all, one way to increase charitable giving is by reducing taxes.  A major tax planning goal here would be to divert dollars that would otherwise go to the government to the charity of your choice with little or no reduction to the estate of your children, or if there is, finding ways to replace it.  If we're successful in doing this, everyone wins.

The reason for the tax preferences to begin with is to promote charitable initiatives in the private sector.  In many cases this can be done more efficiently by individuals than by transferring all of societal needs to the government.  Those with higher taxable incomes and net worth should certainly take advantage of these techniques.  Keep in mind that whether given during lifetime or after death, charitable gifts are eligible for a tax deduction, but only if made to a “qualified charitable organization”.

Because there are so many planning strategies available in these areas, this section will be gradually expanded over time.