Big Tippers

With 2014 winding to a close, we’ve been scratching our collective heads to find the perfect gift for our professional advisor friends. And then it hit us: How about year-end charitable giving tips shared by other professional advisors? It seemed like the perfect idea, plus meaningful tips from your peers are way better than one of these.

Jeffrey S DibleTHE TIPPER: Jeff Dible, Board Certified Trust and Estate Lawyer at Frost Brown Todd LLC


#1: Don’t forget the three little words

As in “No tax due”. “If a spouse has died in 2011-13 and if the filing of a federal estate tax return is not required, the surviving spouse has until Dec. 31, 2014 to file a ‘no-tax-due’ Form 706 in order to make a portability election,” says Jeff. “See IRS Rev. Proc. 2014-18 for details.”

#2: Mind the estates of the union

In this new, post-ATRA era of estate planning, Jeff offered an additional estate planning tip, that “Married couples with little or no risk of owing federal estate tax should consider using – instead of credit shelter planning – techniques that cause assets to be included in each spouse’s ‘federal gross estate’ at death, to achieve a basis step-up for income tax purposes at each death.”

CICF’s own Mary Stanley, Director of Gift Planning & Legal Affairs, JD, CAP®, added that for estates that are no longer at risk of owing federal estate tax, one result of achieving a basis step up as Jeff suggests is that a couple could plan for the surviving spouse, rather than the estate, to make a charitable gift of a valuable asset with a stepped up basis, thereby allowing the surviving spouse the benefit of a charitable income tax deduction even though the estate could not have obtained an estate tax charitable deduction if that asset had been left to charity in the estate. Of course the primary motivation would be the benefit to charity, but if there is a tax benefit to be had, let’s have it!


bio-DonnaKellisonTHE TIPPER: Donna Kellison, CPA/PFS, Tax Director at Blue & Co., LLP


#1: An over-the-counter remedy that can cure year-end blues

Donna offered this year-end planning nugget on the topic of charitable gift planning. “Rather than make charitable gifts of cash, use appreciated over the counter stock held more than one year.”

Then Donna rattled off an impressive list of benefits that can come from making charitable gifts of publicly stock, including:

  • Deduction is at fair market value rather than adjusted basis so no one ever pays tax on the appreciation.
  • Eliminating the gain from your income could also save taxes and deductions tied to your adjusted gross income.
  • No appraisals required but be sure to obtain the gift letter from the charity.

edgerton_nan_17SPECIAL BONUS TIP! CICF’s Nan Edgerton, Senior Gift Planning Advisor, reminds us that the devil is in the … paperwork.

Says Nan:

The charitable giving season is a good time for advisors to remember the IRS record-keeping and substantiation rules on donors who make charitable gifts. While the IRS provides Publication 1771 and other useful information, it’s helpful to remember these basics.

  • A donor must maintain a written record for any contribution of cash, a check or other monetary gift made to a charitable organization.
  • A donor is responsible for obtaining a written acknowledgment from a charity for any single contribution of $250 or more before the donor can claim a charitable contribution for federal income tax purposes.

For single contributions of $250 or more, recipient charities can assist their donors by providing a timely written statement containing: the name of the charity, the date of the contribution, the amount of the contribution, and a statement that no goods or services were provided by the organization in return for the contribution, if that was the case.

If you and your clients have questions, we are always happy to assist. Call Nan at 317.634.2423, ext. 510. Remember the call is free.

john kerrTHE TIPPER: John Kerr, CFP, Edward Jones

THE TIP: #1. It’s later than you think. Way later.

John says that right NOW is the time to discuss with your clients their “charitable giving intentions and how to make the most of potential tax advantages.” John also had some great ideas your clients can use before year’s end as they work toward their financial goals (and maybe even a wintry getaway to one of these places):

  • Check in on your progress toward reaching your financial goals to assess whether your current road map still applies to the year ahead.
  • Review individual holdings within your portfolio to determine whether any gains or losses should be recognized in 2014.
  • Contribute to an IRA for 2014 now and sign up for automatic monthly contributions for 2015.
  • Consider increasing contributions to your employer-sponsored retirement plan.
  • Contribute to a 529 college savings plan for a love done before the end of the year ($14,000 gifting limit per donor, per beneficiary).
  • Review your insurance coverage to help ensure you and your family have the right amount and type regarding your situation.
  • Discuss your charitable giving intentions and how to make the most of potential tax advantages.
  • Call your financial advisor today to make the right moves before Dec. 31.

Thanks to our tippers for their insights and help (all of whom are members of our Professional Advisor Leadership Council and are coming to the end of their three-year terms). We appreciate your leadership, commitment to your clients and to our community!

The information set forth in CICF’s Professional Advisors Perspectives newsletter is subject to constant change and should serve only as a foundation for further investigation and study of the current law and regulations related to the subject matter covered herein. CICF and contributing tippers hereby disclaim any and all responsibility or liability that may be asserted or claimed relating to or arising from, or claimed to have arisen from, reliance upon the information set forth herein.

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