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Charitable gifting is a powerful strategy that can minimize tax liability while supporting causes close to the heart. The advisors at 1900 Wealth can assist in selecting the right philanthropic gifting solutions designed to both ease tax burden and give to charities.

“A thoughtful financial planner can help a philanthropic client accomplish multiple objectives through charitable giving, including minimizing one’s tax liability, increasing one’s income and maximizing the value of the assets passed on to family members,” said 1900 Wealth Senior Advisor Dan Slattery, a CPA and Personal Financial Specialist.

A charitable gift strategy may not be appropriate for all clients, but it is one Slattery recommends often for clients who are interested in helping others and giving back to their community. His first order of business when working with a philanthropic client is to have a frank conversation about his or her personal interests and objectives and suggest a tax-advantaged plan to meet those objectives.

One option is the charitable rollover. Often called a qualified charitable distribution, it allows a person 70½ years or older to pass up to $100,000 of their required minimum distribution from an IRA directly to charity without declaring that amount as taxable income.

Another vehicle is the donor-advised fund (DAF). Essentially, this is an account dedicated solely to supporting a client’s preferred charitable organization(s). When a client deposits cash, securities or other property into a DAF, the tax deduction may be taken immediately, while the disbursement is made to the charity in a subsequent year. By carefully timing charitable contributions, a donor may be able to maximize tax deductions.

The donor can contribute to the DAF frequently and can recommend grants from the fund. The charity can invest the funds for tax-free growth in the meantime. The donation cannot be revoked or returned to the donor or any other individual, and it cannot be used for any purpose other than making grants to charities.

Those who might benefit from a DAF include:

  • An individual who wants to create a long-term charitable giving plan but is seeking an alternative to the hassles of a creating a private foundation;
  • An individual who is not achieving the best income tax benefit from the annual giving amount;
  • A private foundation that has difficulty meeting its 5% annual distribution requirement; and
  • An individual who wants to pass appreciated property to a public charity but has not yet identified the public charity to which the proceeds will pass.

A donor-advised fund provides a great deal of flexibility and is a useful alternative to creating a private foundation, which involves legal and accounting fees and is subject to a 1.39% annual excise tax on net investment income.

A DAF is a separate entity from the donor. While the donor may advise the fund where its distributions should go, the assets in the DAF no longer belong to the donor.

The advisors at 1900 Wealth can offer other philanthropic giving solutions designed to ease a client’s tax burden and become a champion for charities.

Headquartered in San Antonio and serving Central and South Texas, 1900 Wealth offers financial services in areas such as investment management, advisory services consulting, family education and governance, charitable gifting and iDirect.

Investment advisors at 1900 Wealth take a holistic approach to building each client’s portfolio, tailoring an investment plan to fit that individual’s personal preferences and unique circumstances. Advisors consider the client’s time horizon, ability and willingness to accept risk, liquidity needs, the strength of their current and future income, tax situation, return expectations and other assets on their balance sheet. This holistic planning creates investment plans for clients that cover the incremental parts of their financial lives while ensuring they all work together. In essence, it is an investment strategy that regards the whole as greater than the sum of its parts.

1900 Wealth Management LLC is a wholly owned subsidiary of Jefferson Bank and a Registered Investment Adviser with its principal place of business in Texas. Investments offered through 1900 Wealth are not FDIC-insured, are not a deposit of or guaranteed by the bank or any of its affiliates and are subject to investment risks, including possible loss of the principal invested. The information contained herein is not a solicitation and is not intended to be used as tax or legal advice. Individuals should consult with their tax professional or attorney regarding their specific situation.

Deposit products offered by Jefferson Bank, Member FDIC.

1900 Wealth

1900 Wealth, previously Monticello Wealth Management, is a San Antonio-based investment advisory firm focusing on building structured wealth management plans for high-net-worth individuals and families.