It’s easy to get caught up in both the joys and obligations of the holidays between the party frenzy and the nonstop shopping! Don’t let the hectic season stop you from making a real difference today and support a cause you believe in. Your charitable donation to the American Red Cross ensures we are there for millions of people who face emergencies year-round and help as they rebuild their lives. Although charity should be altruistic, there can also be some great tax benefits for those who give. However, to receive those benefits, timing your gift at year-end can be crucial. The gift date—the date used for tax purposes—is the day you transfer control of the asset. And that depends on the asset and your method of giving. Read below to make sure you keep in mind how a simple date could affect you.
How the Gift Date is Determined:
- Checks — The USPS mailing date, as postmarked, is the date of the gift.
- Credit cards — The day the charge is posted by the credit card company is considered the gift date.
- Pledges — Pledges are deductible in the years they are fulfilled and not the year the initial pledge is made.
- Securities — If securities are electronically transferred to the American Red Cross, the gift date is typically the day the securities enter our account. If security certificates are mailed, the mailing date, as postmarked, is the gift date. It is important to send, by registered or certified mail, the unsigned certificates in a separate envelope from the signed stock power and letter indicating the purpose of your gift.
- Real estate—The day you deliver the signed deed to us is the date of the gift. If your state law requires recording of the deed to fulfill the title, though, then the date of recording is the gift date.
- Tangible personal property—The gift date is the day you deliver the property with a signed document transferring ownership, if necessary.
Charitable IRA Rollover
The Charitable IRA Rollover has been a popular option for friends of the American Red Cross, who are 70½ or older, to transfer up to $100,000 directly from an IRA to the Red Cross, without having to declare the funds as taxable income. Your IRA administrator must initiate the rollover. Speak with your CPA or other advisor to determine if an IRA Charitable Rollover is the right choice for you.
As you decide how best to fulfill your year-end gift to the American Red Cross, please take into consideration the time needed by brokerage firms and fund administrators to process your requests. If you have any questions, please feel free to contact Colleen Becht-Foltz at 215-299-4082 or via email at firstname.lastname@example.org. Thank you for supporting the American Red Cross.
This information is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.