Ideas for Tax-Efficient Donations

December 16, 2021
David J. Haas CFP®, President, Cereus Financial Advisors, LLC
New York-New Jersey Trail Conference


Ideas for Tax-Efficient Donations


David Haas, president and founder of Cereus Financial Advisors, LLC in Franklin Lakes, N.J., has been a Trail Conference member and volunteer for over 30 years. He often shares his expertise on charitable giving with the Trail Conference family to help both our supporters and our mission.

If you want to join me in charitable giving, here is a list of ways to do it which are the most income tax efficient*:

CARES-Act $300/$600 donation

Even if you don’t itemize your deductions, you can deduct up to $300 if you file single or $600 for married for donation by cash, credit card, or check. Like any tax-deductible donation, no goods or services must be received as part of the donation.

Qualified Charitable Distribution

 If you don’t need your IRA for income, the QCD is a very effective way to make a donation if you are over 70 ½. The limit is $100,000 per year and the funds must be directly transferred to the charity from your IRA (a check made out to the charity directly). Most IRA custodians have a form to fill out for the QCD or you can do it online. The charity needs to cash the check this year for the QCD to count for 2021. For maximum tax benefit, use a traditional, SIMPLE, or SEP IRA and not a ROTH IRA or an IRA with post-tax contributions. You avoid paying tax on the distribution, which normally would have been taxable at ordinary income rates, but you will not be able to deduct the contribution. The nice thing about the QCD is that you don’t need to worry about itemizing your deductions to get the tax benefit.

Donate Appreciated Securities

This is a great way to get a tax benefit if you have stock which you would owe a lot of long-term capital gains tax on if you sold it. The stock market has done great the past two years and many people are sitting on significant gains. If you donate the stock directly to the Trail Conference, you won’t have to pay capital gains tax on the sale of the stock and at the same time you can take a tax deduction for the full value of the stock being donated. You should choose stock (or other securities) with a low tax basis to get the maximum value and you must have held the stock over one year. You also should keep in mind that you can only deduct 30% of your Adjusted Gross Income in any tax year, although there is a 5-year carry forward provision that allows you to use any unused deduction in future years. You will need to itemize deductions to take full advantage of this technique.

*This information is for general educational purposes only and does not constitute specific tax or investment advice. You are should consult your own tax advisor.

Ways to make your gift qualify for 2021 tax year benefits

Online giving: Make your gift online here.  We will issue a 2021 tax receipt for online gifts submitted by December 31, 2018 at 11:59 pm (EST).

By Mail: Checks sent via mail must be postmarked on or before December 31 to count for tax year 2021. Gifts should be mailed to: Trail Conference 600 Ramapo Valley Rd Mahwah NJ 07430

Stock gifts: Donors often find that making a gift of securities is very beneficial due to the tax benefits that derive from such a gift. Please contact Director of Donor Advising, Don Weise for wire transfers information

We hope you find this information helpful, and we hope you have a truly enjoyable holiday season. Thank you for all you do to support!