Charitable Deduction Changes Provide Opportunity If You Act Now
West Essex Tribune
November 10, 2005
There have been several recent tax law changes affecting charitable deductions that provide a unique opportunity if done by the end of this year.
- The limitation on most charitable donations of 50% of Adjusted Gross Income has been changed to a limit of 100% of Adjusted Gross Income for donations made from August 28, 2005 to December 31, 2005.
- The itemized deduction phase-out for most charitable donations made from August 28, 2005 to December 31, 2005 has been eliminated.
These changes mean it may be the ideal time for you to consider a charitable remainder trust. If properly set up the Charitable Remainder Trust gives you three important benefits:
- You pay less income tax. You get a charitable donation n income tax deduction you can use to pay less income tax on your 2005 income.
- You guarantee an income stream for life. The trust will pay you an annuity for your lifetime.
- You pay less estate taxes. On your death, the trust qualifies for a charitable deduction from your estate taxes.
Depending on your situation, there may be additional benefits such as deferring capital gains tax on property you contribute to the Charitable Remainder Trust.
Of course, one of the biggest benefits is leaving a legacy with your name on it to benefit future generations.