Beware of Deadlines
December is a busy month for most people, but if you’re thinking of making gifts to family or charity before year’s end, keep in mind a few deadlines:
If you mail a check to charity, it qualifies as a 2014 gift for income tax purposes if it’s postmarked by December 31, even though the charity doesn’t receive or cash the check until sometime in January.
Gifts given to family members by check are complete for tax purposes when the checks are cashed. If it’s important that a check to a child or grandchild be considered a 2014 gift, allow enough time for the recipient to get to the bank. Keep in mind that in 2014 you can give up to $14,000 each to as many people as you wish, with no gift tax due. Married couples can give up to $28,000. The $14,000 limit applies also to 2015 gifts.
If you’re planning to give stock or mutual fund shares to charity, start the process early. A gift is considered complete for tax purposes when the shares reach the charity’s account, not when you give the order to your broker. Stock gifts can be completed in a few days, but mutual fund share transfers can take several weeks. If you’re giving shares in certificate form, call us for transfer instructions.
A charitable gift from an IRA by someone age 70½ or older must be completed by December 31 to be a qualified charitable distribution. Although the legislation allowing transfers of up to $100,000 to be tax-free expired at the end of 2013, renewal is included in the extender package Congress is considering. Call us if you have questions about the law’s status or if you plan to make a transfer directly from an IRA.
Director of Institutional Advancement
The materials contained on this website are intended only to show some ways by which you can make a charitable gift or bequest and thereby minimize federal tax liabilities, as authorized by the Internal Revenue Code. All examples are of a general nature only and should not be applied to your specific situation without first consulting your attorney or other advisers.