Spring 2017 Issue of Horizons

and in the event that the donor passes or the fixed term ends, the assets in the CRT are transferred to a charity. The CRT will not recognize gains and instead will defer the gain and spread it out over annual payments. This provides the donor a current year charitable deduction for the discounted value of the assets transferred to a charity in the future, while reducing the donor’s taxable estate. Charitable Giving from an Individual Retirement Account (IRA) You are allowed to make a tax-free donation of up to $100,000 of your required minimum distribution to a qualified charity. Instead of taking your required distribution, you can have it directly sent to the qualified charity of your choice. This will lower your adjusted gross income and allow you to avoid reporting the income and paying taxes on the distribution. As an estate planning tool, thought should be given to naming a charity as the beneficiary of an IRA or other retirement account.

As the beneficiary of an IRA or retirement account, charities do not pay tax on distributions, whereas an individual beneficiary will pay tax at ordinary rates. An estate can also take a charitable deduction on the amount of the IRA or retirement account donated to a qualified charity. Going Forward Charitable giving may not be an option for everyone. For many, philanthropy is about personal values and not just the fact that it may create a tax deduction. You have to decide if it is important to you, and if it is, the next step is planning. Many of the options previously described involve extensive planning. In light of the recent election, it has been speculated that there could be a cap on itemized deductions. While nothing official, President Trump has informally indicated that he plans on adopting the House’s proposal to eliminate all deductions except for mortgage interest and charitable contributions, as well as eliminate the estate tax. This possibility will be something to watch very closely in the coming months.

WEALTH ADVISORY SERVICES GROUP

The RubinBrown Wealth Advisory Services Group helps clients identify, prioritize and achieve their financial goals and objectives utilizing an experienced group of professionals that can integrate income taxes, estate taxes, financial planning, risk management and investment management needs, all in one place, throughout their lifetimes.

For more information, visit www.RubinBrownWealthAdvisors.com/Financial-Planning .

Jason Uetrecht, CPA, CFP ® , AEP ® Partner Wealth Advisory Services Group 314.290.3283 jason.uetrecht@rubinbrown.com

Mark Breakfield, CPA, CGMA Manager Wealth Advisory Services Group 314.678.3579 mark.breakfield@rubinbrown.com

Spring 2017

43