When many people sit down to think about how they want to leave their property, of course they think first of family. But many of us also want some of our legacy to go to causes or organizations we hold dear--a church, a food bank, a group that advocates on behalf of people struggling with a particular illness. Americans are a generous people, supporting millions of nonprofit organizations.
The U.S. tax system is designed to support these generous impulses, granting donors tax benefits for giving. If you itemize deductions on your income tax return, you can simply deduct the value of gifts to tax-exempt charitable organizations. There are also more complicated ways to give (and to receive). Charitable gift annuities, for example, are an increasingly popular way to donate to a charity and in return receive regular payments for life; both you and the charity benefit.
Traditional charitable trusts are usually set up by very wealthy individuals concerned about estate tax; they benefit the charity and can also confer a big estate tax break for families. For the other 99.5% of the population, "pooled" charitable trusts can be a good option, providing both a charitable tax deduction and regular income.
Donate to a charity and get guaranteed income for life.
Giving to Charity With a Donor-Advised Fund
If you want to make a significant commitment to charitable giving, consider a donor-advised fund.
Best Practices for Giving Money or Property as Gifts
Know the tax consequences of giving away money or property during your lifetime.
What Is a Charitable Remainder Unitrust?
Donate to charity and get paid for life.
Tax Deductions for Charitable Contributions
You can deduct charitable contributions from your taxable income--if you follow IRS rules about documenting your gifts.
A Pooled Charitable Trust: Do Good and Get Tax Breaks on a Budget
One increasingly popular way to help out a favorite cause is by donating to a "pooled" charitable trust. You can do this with a contribution of $5,000 to $10,000 -- a lot less than is required to set up your own charitable trust.
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