Donating some PP Assets to Charity (avoiding Capital Gains)
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Donating some PP Assets to Charity (avoiding Capital Gains)
I'm curious if anyone has ever thought about (or tried) donating some of their PP assets — such as Gold or a Gold ETF — directly to a charity to avoid paying some capital gains on that asset? Seems like it would be a good way to maximize gifts to a charity and avoid a fair amount of taxes — especially over a lifetime of giving. On the other hand, I imagine there would be some issues. Anyone have any experience with this?
Last edited by Gumby on Fri Feb 25, 2011 12:05 pm, edited 1 time in total.
Nothing I say should be construed as advice or expertise. I am only sharing opinions which may or may not be applicable in any given case.
Re: Donating some PP Assets to Charity (avoiding Capital Gains)
Not personally, but my dad did something similar. Even better than donating to a specific, individual charity is setting up a charitable trust at Vanguard or Fidelity.
With a charitable trust, you donate whatever you want to the trust (e.g., 500 shares of GLD and 100 shares of TLT), you get to take the tax deduction in the year that you donate to the trust, but then you can make distributions from the trust to any charity essentially whenever you choose. There might be a minimum amount that you have to distribute each year, or something like that, but it's pretty flexible according to what I've read.
Benefit of this is that you can donate a huge chunk to the trust, take the entire deduction in the year you donate it, but then distribute the donation to the charities on whatever schedule you choose.
With a charitable trust, you donate whatever you want to the trust (e.g., 500 shares of GLD and 100 shares of TLT), you get to take the tax deduction in the year that you donate to the trust, but then you can make distributions from the trust to any charity essentially whenever you choose. There might be a minimum amount that you have to distribute each year, or something like that, but it's pretty flexible according to what I've read.
Benefit of this is that you can donate a huge chunk to the trust, take the entire deduction in the year you donate it, but then distribute the donation to the charities on whatever schedule you choose.
Re: Donating some PP Assets to Charity (avoiding Capital Gains)
I did this very thing in both 09 and 2010. Most communities have community foundations where you can get the full value of your appreciated assets as a tax deduction. In other words, with the run up in Gold, you gift the GLD to the foundation and get the full value of your gift as a tax deduction and then they sell it and you can designate gifts to your church, university or other not for profit that you want to support. Advantage is that you can make your gifts to the foundation when you maximize the tax deduction and then you can spread the gifting out over several years if you wish to support your charities.