Wealth Management & Financial Planning

Wealth Management & Financial Planning

Gifting Appropriately

As the baby boomer generation grows older and accumulates more wealth, many will begin to look at how they can gift some of this to those people, or places, they love. Whether it be tithing to a church, giving to a favorite charity, or simply gifting to their children because they want to see them enjoy what would be their inheritance anyways, gifting is a subject many families we take care of are passionate about. But did you know there are more efficient ways to give other than just from your income?


Gifting to Charity

Consider the following ways to give to charity more efficiently than just donating cash.

  • Appreciated stock – Let's say you bought a stock at $10 per share over one year ago, and that same stock is now at $50 per share, and you have 100 shares. That means your cost basis is $1,000, but the fair market value is $5,000. You can gift this stock to charity and take a deduction (if you itemize), and you will not have to pay the $4,000 capital gain on that stock.
  • Qualified Charitable Distribution (QCD) – When you reach age 70 ½, you can donate directly to a qualified charity from your IRA, tax free to you and the recipient. You cannot take a deduction, but it could minimize future Required Minimum Distributions (RMDs) and keep you from landing in a higher tax bracket.
  • Double Stacking – If you give cash to a church or charity every year and are just under the threshold to take an itemized deduction, this is for you. If you give $20,000 to church or charity every year, to take advantage of this tactic, you would not gift for a whole year and instead give that $20,000 in January of the following year along with the $20,000 you would already be giving to have charitable giving of $40,000 that year.


 Family Giving

  • Appreciated stock – Return to our previous example of the stock you bought for $10, now at $50. If you gifted your child this same stock, your child would be liable for the $4,000 capital gain, so why would you want to do that? If you are in a higher tax bracket, your child’s tax liability could potentially be much lower than yours, so another thing to consider is that currently if someone is in the 12% tax bracket or lower, the capital gain tax liability would be $0.


Giving to Charity at Death

  • Beneficiary Designation on IRAs – Many families want to ensure that part of their assets go to charity upon their death. Remember the QCD from earlier? You could name a charity as one of your beneficiaries on your IRA, and just like a QCD, it is tax-free to you and the charity and passes to the charity directly at death.


When it comes to giving, our goal is not to have you give more (unless that is your goal) but rather more efficiently. These are a few ways in which you can still be free to give but ensure you and the person or charity, not the IRS, get the maximum benefit.



Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

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