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Efficient Philanthropic Giving & Fourth-Quarter Housekeeping (Mid-3Q19 Newsletter)

Updated: Sep 27, 2022

September 15, 2019

Easing into the last few months of the year means smart fourth-quarter housekeeping, with special attention to tax efficient ways to make charitable gifts. The issues are complex; we're here to help you step through your fourth-quarter financial life.

A Word from the Editor

by Kit-Victoria (Weil) Wells – Culture & Communications Officer

For many of you, sharing your time, talent, and financial support in pursuit of a stronger, healthier community is a focal point of your financial life. For others, you may be hoping to do more of this in the future. In any case, CWC is here to help you plan your gifting, and to do so in a thoughtful manner. As we ease (or barrel, depending on your perspective) toward the last few months of the year, CWC Financial Advisor Tyler Hewes opines on his best ideas for smart fourth-quarter housekeeping, with special attention to tax efficient ways to make charitable gifts.

As you read through Tyler’s piece, you may be struck by the complexity of these issues. Remember that we are here to help you step through your fourth-quarter financial life and help you decide which course of action is right for you. (As with all tax planning matters, we ask you to please discuss your plans with your tax preparer in advance of taking any action.)

Efficient Philanthropic Giving & Fourth-Quarter Housekeeping

by Tyler Hewes, CFP®

If you’re anything like me, the end of the year comes with a flood of charity giving requests. As charities work to close gaps in their 2019 funding or plan for a strong start to 2020, you may be tempted to just write a check. We are here to say “Wait!” Before you pull out your checkbook, consider these tax and administratively efficient alternative ways to give. Here are a few ways to make gifts that may help you avoid current or future taxes:

1. Gift Appreciated Stock. If you have any stock positions that have appreciated in value, consider giving this to your charity instead of cash. Giving in this manner has several benefits:

  • You avoid spending your cash-on-hand by instead gifting the number of shares equal to whatever dollar impact you would like to make.

  • You get a tax benefit equal to the value of the stock the day it is donated, rather than the amount you paid for it.

  • You avoid capital gains tax by gifting away instead of selling.(Avoiding a taxable event is a better strategy, on average, than taking a deduction.)

  • If you like the long-term prospects of the position and want to continue to own it, you can donate the security and then use your cash-on-hand to buy an equal amount of the position – thereby continuing to own the position, while resetting your basis to the current fair market value.

2. Gift the Required Minimum Distribution (RMD) from your IRA. My fellow advisor, Rob Gaan, wrote an article about this a few months back and it still holds true: if you are age 70.5 or older, you can give your RMD to a charity by way of a Qualified Charitable Distribution (QCD). One advantage to a QCD is that you avoid the taxable income of your RMD, potentially reducing your overall tax burden for the year. With the changes to the tax law in 2018 and the increase in the standard deduction, a QCD can act as a “back- door” charitable deduction if you are limited to only taking the standard deduction. (This may be another instance where avoiding taxation may be better than a deduction.)

3. Open a Donor Advised Fund (DAF). A DAF is a giving vehicle that allows you to gift and take the deduction in one year, and distribute the gift to a charity in another year. Fidelity Charitable (the platform we use for DAFs) can open a DAF into which you can donate either appreciated securities or cash, and realize a current-year tax deduction. As the primary donor, on your own timeline, you can direct donations to the charities of your choice (either by calling CWC or going through the Fidelity Charitable website). This gives you the flexibility to plan the deduction in one year (perhaps a year when your taxable income is higher), and the gifting in another.

Fourth-Quarter Housekeeping:

1. Max out contributions to your tax-advantaged accounts. If your cash flow allows, make sure to contribute the maximum to your 401(k), 403(b), Health Savings Account (HSA), SIMPLE IRA, and/or 529 accounts. Each of these accounts have a year-end filing deadline (as opposed to an IRA, which uses April 15th as the deadline).

2. Exhaust your Flexible Spending Account (FSA). Spend down the funds in your FSA (to be spent on health care expenses). Avoid forfeiture of the funds by spending them by the (generally) 12/31 deadline (some plans may vary). Your FSA is a “use-it-or-lose-it” arrangement.

3. Take your Required Minimum Distribution (RMD). If you are over age 70.5 or have inherited an IRA, be sure to take your complete RMD for 2019 by 12/31. The IRS levies a 50% penalty on any amount of your RMD that you have not taken by the end of the year, so be sure to take the cumulative RMD based on the value of all your IRAs.

4. Check your credit report. By federal law, the three credit reporting agencies (TransUnion, Experian, and Equifax) must provide you with a free copy of your credit report once every 12 months when requested. With the rise of cybercrimes and identity theft, regularly monitoring your credit report for suspicious activity is well worth your while.

5. Review your Trust/Will/Estate Plan. If anything has changed in your financial life over the course of 2019 (marriage, divorce, births, deaths, etc.), now is the perfect time to make sure your new circumstances are reflected in your estate plan.

6. Review your insurance coverages. Review your auto, home, umbrella, and life policies. Do you need to increase (or decrease) coverage? Are your beneficiary designations current? Is it a good time to replace any expiring term life policies, or replace a permanent policy at lower cost?

7. Consider making charitable gifts. There are ways to make year-end gifts in a tax and cash efficient manner. If you are age 70.5 or older, consider gifting your RMD through a Qualified Charitable Distribution (QCD) to avoid the taxable income. If you hold appreciated stock and/or mutual funds in your portfolio, consider contributing that position to charity to avoid realizing a capital gain. For more details on tax and cash efficient gifting, refer to “Efficient Philanthropic Giving” above.

Information contained in this publication is obtained from sources believed to be reliable; however, no representation as to accuracy and completeness of this information/data can be provided. Data used may be based on historic returns/performance. There can be no assurance that future returns/performance will be comparable. Neither the information, nor any opinion expressed herein, constitutes a solicitation by us for the purchase or sale of any securities or commodities. This publication and any recommendation contained herein speak only as to the date hereof. Christopher Weil & Company, Inc., with its employees and/or affiliates, may own positions in these securities.

All investments involve risk, including the risk of losing principal. It is vitally important that you fully understand the risks of trading and investing. All securities trading is speculative in nature and involves substantial risk of loss. Further, the investment return and principal value of an investment will fluctuate; Upon liquidation, a security may be worth more or less than the original cost. Past results do not guarantee future performance.

Investment in mutual funds is also subject to market risk, investment style risk, investment adviser risk, market sector risk, equity securities risk, and portfolio turnover risks. More information about these risks and other risks can be found in the funds’ prospectus. You may obtain a prospectus for CWC's mutual funds by calling us toll-free at 800.355.9345 or visiting The prospectus should be read carefully before investing. CWC's mutual funds are distributed by Rafferty Capital Markets, LLC—Garden City, NY 11530. Nothing herein should be construed as legal or tax advice. You should consult an attorney or tax professional regarding your specific legal or tax situation. Christopher Weil & Company, Inc. may be contacted at 800.355.9345 or


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