End Of Year Giving

A Word on Year-End Giving from Trinity Foundation

As Congress considers ways to overhaul the U.S. tax code, you may want to look closely at your current charitable give to Trinity Church, Trinity Foundation or any of your favorite charitable organizations before the end of the 2017 calendar year. The Board of the Trinity Foundation strongly encourages anyone considering an end-of-the-year contribution to consult with their financial advisor or tax consultant.

Several proposed tax reforms will impact charitable giving. These reforms include reductions in marginal tax rates, caps on total itemized deductions, caps on the maximum tax rate at which all itemized deductions can be allowed, increases to the standard deduction or reductions in other itemized deductions, and elimination or reduction of the estate tax. The complications and implications of these proposed tax reforms are all the more reason to consult with your financial advisor.

One key component of the proposed changes that may impact Trinity parishioners is the cap on total itemized deductions starting in the 2018 tax year. Depending upon an individual's income bracket, these caps reduce or remove incentives for taxpayers to give.  One way to prepare for that would be to combine two years' worth of gifts into one. Instead of making gifts in two separate years, make a larger gift before the end of the calendar year to have a higher amount contributed in 2017 in order to get over the standard deduction threshold. This may be especially beneficial to anyone with an outstanding pledge to the Trinity Capital Campaign or anyone inclined to pre-pay their 2018 stewardship pledge.

Another proposed change in the Senate tax legislation (but not in the House version) would affect the sale of stock, which might make it more beneficial to gift shares this year.

Under current law, investors with taxable brokerage accounts have several choices when putting in a sell order for stock shares: They can direct their broker to sell the oldest shares first (the first-in-first-out, or FIFO, method) or direct the sale of shares that were purchased on a particular date (specific identification method). Those same choices apply when identifying shares to gift.

The Senate bill's provision requires stock investors to divest their oldest shares first regardless of whether those shares come with the lowest cost basis. This pertains to the gifting of any appreciated asset.

Again, the Board of the Trinity Foundation is available to assist anyone interested in making a year-end gift to Trinity Church or its Foundation, and encourages parishioners to consult their financial advisors when making an important financial decision of this kind.

Merry Christmas!