The Impact of Charitable Gifting Laws

Hi. I’m Carol with Kendall Capital, here with a two-minute tip to help you, the middle-class millionaire saves both money and your precious time.


Today, I’m going to talk about charitable giving. We have so many wonderful organizations right here in Montgomery County, Maryland where even the smallest donation can make a really big difference. But this year, instead of reaching for your checkbook, take a look at your financial statement. If you have stocks or mutual funds with large gains, consider utilizing those to donate instead of cash. That’ll save you some money because you won’t have to pay capital gains tax, which is usually 15%, but maybe even 20% for some of you middle-class millionaires.

Now, here’s a tip to save you some time. Open a donor-advised fund. It’s like a special brokerage account just for charitable giving. When you use a donor-advised fund, you’re donating that stock or mutual fund directly to a special account that converts it to cash and use that cash fund to write checks to various charities or religious organizations. It summarizes everything for you over the course of the year and makes prepping your tax return a breeze. That’ll save you some time.

Oh, and speaking of taxes, 2018 brought us a lot of changes in how deductions work. Now there’s a $10,000 cap on your state, local, and property taxes, so for a lot of middle class millionaires, that’s pretty much all they had to deduct. They might consider just using standard deduction as their filing method, and their charitable donations might not be tax deductible.