CHARITABLE GIVING
Trends in Charitable Giving as 2021 Ends
ALLISON L. KIERMAN | JE FEATURE
THANKSGIVING MAY
be over, but here’s something
that’s still related to giving
thanks: There are fewer than
30 days left in the year. That’s
less than a month to complete
your 2021 charitable giving,
develop or follow through on a
tax strategy and make certain
tax elections. Yikes!
But there’s still time to act.

As you think about end-of-year
giving, here are some current
trends to consider:
Tax strategist versus
philanthropist Charitable giving is often
thought of as something for
those who are philanthro-
py-minded. It certainly can be.

Charitable giving allows one
to provide financial support to
causes that are meaningful and
make a legacy in one’s commu-
nity. To others, however,
charitable giving is foremost a
tax strategy. It is giving to causes
and organizations, instead of
giving to the government.

For 2021, the Consolidated
Appropriation Act of 2021
(the sixth COVID-related bill
enacted by Congress) permits
the following:
A charitable deduction of
up to $600 for couples filing
jointly, $300 for individual
taxpayers. This is an above-
the-line contribution that is
deducted from the individual
taxpayer’s income.

Individual taxpayers who
itemize their deductions can
deduct up to 100% of their
adjusted gross income.

Corporations can deduct
25% of taxable income in 2021.

The donations must be in
cash, to a qualified charity,
not a Donor-Advised Fund or
private foundation, and must
be made during 2021.

arthon meekodong iStock / Getty Images Plus
GI VING
Using a Donor-Advised qualified charitable organiza- can modify the beneficiaries Conservation
Fund tions, after consultation with of the DAF at any time (with easement
A DAF is like a charitable
investment account. You can
set one up through many insti-
tutions. A donor contributes
cash, securities or other assets
and can claim a tax deduc-
tion in the year in which assets
are contributed to the DAF.

However, the DAF holds the
fund for future distribution to
the donor.

Distributions can be made
at any time, during life and
after the death of the donor.

Assets in the DAF are invested
by the institution and may
grow over time, increasing in
the amount that is ultimately
donated for charity, but with
no tax to the donor. The donor
some limitations).

Many donors even use funds
in their DAF to make their
annual synagogue membership
contributions. It is important
to note, once funds are
contributed to a DAF the gift
is irrevocable; and the funds
cannot be later withdrawn and
used for other purposes.

A conservation easement is a
voluntary legal agreement to
permanently limit the use of
land to protect its conserva-
tion values. Conservation
easements are either sold or
donated by a landowner to a
conservation organization,
typically a land trust. The
easement preserves the land by
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CHARITABLE GIVING
Financial advice
from a
knowledgeable neighbor.

It is important to take into consideration
both your charitable intentions and consult
with a tax professional when weighing
whether a tax strategy through charitable
giving is right for you.

restricting its development for
commercial uses.

Conservation easements
provide tax benefits to
landowners who can claim
the value of the easement as
a tax-deductible charitable
donation. Because land is oft en
an appreciating asset, this
amount frequently exceeds the
price paid for the land.

For individuals that do not
have land to donate, there may
be opportunities to invest in
an entity that is purchasing
land in which a conservation
easement is later donated. Th e
individual donor thereaft er
receives a K-1 and can claim a
portion of the donation on his/
her personal tax returns.

Th ese types of investments
are closely scrutinized by the
IRS and may increase the risk
of an audit, so all proper proce-
dures must be followed before
claiming a deduction for such
an easement.

Charitable trusts
Charitable trusts are also
important tools in successful
tax planning. Like a DAF, the
charitable trust is created to
allow for a one-time lump
sum contribution that is later
distributed over a longer
period. Th ere are two main
types of charitable trusts:
Charitable Lead Trust.

Th is is a trust which provides
a stream of income to a charity
of the trustor’s choice for years
or a lifetime. Aft er the period
of years, or at death, whatever
is left goes to the trustor’s
benefi ciary(ies) with signifi -
cant tax savings.

Charitable Remainder
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Trust. Th is trust provides a
stream of income to the trustor
for years or a lifetime and
then gives the remainder to
the trustor’s charitable benefi -
ciaries, with signifi cant tax
savings once the trust term
is complete.

Clients able to invest a
minimum of $500,000 are likely
to best utilize our services.

This material is not a recommendation as
defined in Regulation Best Interest adopted by
the Securities and Exchange Commission. It is
provided to you after you have received Form
CRS, Regulation Best Interest disclosure and
other materials. ©2021Oppenheimer & Co. Inc.

Transacts Business on All Principal Exchanges
and Member SIPC. 3414611.2
RMDs Th ose who are over 70 ½ can
donate all or a portion of
their IRA-required minimum
distributions (RMD) directly
to charity. Th is is called the
qualifi ed charitable distribu-
tion (QCD). Typically, IRA
distributions are treated as
taxable income. However,
if it is a QCD, the distribu-
tion is excluded from taxable
income. For those already
giving annually to a religious
or other charitable organiza-
tion, there is a strong benefi t
from making the distribution
a QCD instead of taking the
RMD and then later making a
charitable donation.

Jewishly. Exponentially.

Your investment
pays it forward.

Th ese are some of the ideas
and trends I’m seeing in chari-
table giving as we near the
end of the year. As always, it is
important to take into consid-
eration both your charitable
intentions and consult with a
tax professional when weighing
whether a tax strategy through
charitable giving is right for
you. ●
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Allison L. Kierman is the managing
partner of Kierman Law, PLC, an
estate planning law fi rm based in
Scottsdale, Arizona. This originally
appeared in the Phoenix Jewish
News, an affi lated publication of the
Jewish Exponent.

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DECEMBER 2, 2021
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