Central to the PCAF’s mission is the desire to enable Christians to give more and more effectively, making the most of what God has entrusted to them. To that end, we want givers to understand how the various giving strategies we support reduce taxes to enable givers to give more. Use the list below to better understand your options as a giver and the range of tax benefits your charitable donations will achieve.
Advise & Consult and Increase Funds: Both of these donor-advised funds enable you to maximize your charitable deduction and tax savings when you give and deduct in the year of the corresponding high taxable income. Also, when you give appreciated assets (stocks, real estate, private business interests, etc.) to your fund rather than cash, you further greatly reduce taxes and increase giving by both excluding capital gains and taking an income tax deduction for full market value.
Single Charity Fund: With this fund, you will give and then receive a tax deduction in the tax year when the income is earned, for ultimate granting out over time. Direct a QCD from your IRA and gain the equivalent of a deduction while also taking the standard tax deduction – deduct twice!
Non-cash Gifts: Giving appreciated non-cash assets is one of the most tax-efficient giving strategies you can employ. With these gifts you effectively double the deduction and tax savings for the appreciation in your asset, whether it is your vacation home, your real estate development, your cryptocurrency, or your software company.
Public Stocks, Funds and Bonds: As with gifts of appreciated privately-held non-cash assets, gifts of appreciated publicly-traded securities effectively double the deduction and tax savings for the appreciation in the stock or other publicly-traded security.
IRA Charitable Rollover: You may exclude from your taxable income up to $100,000 of IRA Charitable Rollovers to a Single Charity Fund or multiple Single Charity Funds at the PCA Foundation. Your spouse also may exclude up to $100,000 of IRA Charitable Rollovers. As a result, you will eliminate from your taxable income amounts that have never been taxed (and now, never will be taxed) as well as take the standard deduction.
Charitable Remainder Trust: When you give to a PCA Foundation Charitable Remainder Trust (CRT), you take a charitable income tax deduction for the gift now, the trust pays you (or beneficiaries you name) an income stream for life or lives or a period of years up to 20, and the trust pays the remainder to your PCAF donor-advised fund for ultimate distribution to your favorite charities. Essentially, you receive a charitable deduction for wealth from which you or your beneficiaries continue to receive income. A CRT also enables you to defer capital gains tax on non-cash assets given to and sold by the trust. And gifts to the CRT reduce the value of your estate at death, decreasing or eliminating estate tax.
Charitable Lead Trust: A PCAF Charitable Lead Trust (CLT) operates in reverse to a Charitable Remainder Trust. It pays the income stream for life or a term of years to your PCAF donor-advised fund for ultimate distribution to your church and favorite charities, and pays the remainder to your heirs or other beneficiaries (or with certain kinds of CLTs, to you).
If you give the remainder to a named beneficiary or beneficiaries (Non-Grantor CLT), you’ll reduce or zero-out gift and estate taxes. You can use a Non-Grantor CLT also effectively to fully deduct your giving when the amount you desire to give exceeds deduction limitations. If instead you give the remainder to yourself (Grantor CLT) you can take a charitable deduction and reduce income taxes in high-taxable-income years.
Bequests and Accelerated Giving: Giving part of your estate to a charity through a PCAF donor-advised fund provides tremendous flexibility. You gain the peace of mind that comes from knowing you can monitor charities and make changes to your charitable giving plans without the cost and trouble of amending your will or living trust. Charitable bequests are deductible 100% from the taxable estate, so if you otherwise would have a taxable estate, the charitable deduction may reduce or eliminate estate taxes.
But giving from your estate, as convenient as a PCAF donor-advised fund makes it, carries a significant drawback for givers subject to high income taxes: testamentary gifts are not deductible, so an estate giver does not achieve the tax savings that would enable yet greater giving. PCAF assists highly-taxed givers to make the projections that enable them to push forward their estate giving to current years of high-taxable income, when they can deduct that giving and achieve corresponding tax savings.
Our donor-advised-fund tax benefits lead to better stewardship of resources, and the tax advantages that accompany the PCAF’s complex giving options make extraordinarily generous giving possible for many Christians. And PCAF makes that complex giving simple for you.
To learn more about how you can reduce your taxes through our services or open a donor-advised fund, visit https://pcafoundation.com/donors/ today. Would you like to help your church members give more from a variety of assets? The PCA Foundation now offers free, in person workshops covering basic estate and gift planning, non-cash giving, and advanced gift planning. Learn more at https://pcafoundation.com/smart-giving-workshop/ .