Giving to a charitable trust is supporting noble causes close to your heart. The donations you contribute go a long way in helping the less privileged in societies. However, giving can also be an important part of your financial planning, tax, and estate. However, this depends on the amount you want to give, how you want to give it, and the type of your estate. You might be confused about which sort of charitable giving works best for you. Here are the different ways you can give donations.
1. Real estate
For people with a property they don’t use and who would pay huge taxes if they sold, donating can be an option. If you are living in the property, you can put it for donation to a charitable trust by having the title transferred after your death. If you do that, your home will be removed from your estate, lowering estate taxes. However, there are instances where you can be eligible for tax deductions equal to the fair market value of the real estate. Remember, you should document well any property you give to charity.
2. Cash
Cash is the most common and simplest way people give donations to charitable trusts. Your tax deduction equals the amount of cash you donate without any goods or services you received in return. The reason people love donating cash is because it’s easy, and there are no complicated tax deductions or benefits to take care of. The only thing you need is a receipt of your contribution.
3. Donor-advised funds
It refers to a kind of donation that gives a non-refundable amount either in cash or securities. You can order the fund administrator to send funds to the organization of your choice. As a result, you can receive the maximum tax benefit for your contribution. In addition, you can continue the funds even after your death.
Giving to charitable trusts is a person’s preference, not a must. Also, you get to give to the organization of your choice. You have ways you can donate, choose one that suits you.
