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Volume 8-12
December, 2008
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DONOR-ADVISED FUNDS MAINTAIN POPULARITY
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According to Giving USA Foundation's 2008 study, during the years 1967 – 2007, total charitable giving in current dollars was up every year except 1987. In years with 8 months or more of recession, giving declined at an average rate of 2.7 percent per year (adjusted for inflation). Recent polls of donors indicate donors intend to continue their giving during these difficult economic times. Several polls indicate donors may even increase their giving, yet may be more strategic in their giving.
Donor Advised Funds are proving to be one of the ways donors are “strategic” in their giving. “Donors of the Renaissance Charitable Foundation are using their Donor Advised Funds as they were designed to be used” said Gregory W. Baker, President of Renaissance Charitable Foundation. “As compared to this same period in 2007, we have seen an increase in the number of grants, increase in the number of charities receiving grants, increase in the number of donors making grants and an increase in the number of donors making gifts” said Baker.
Donors use Donor-Advised Funds (DAFs) for many reasons – simplicity being high on the list. One strategy we see more often during this economic slump is “loss harvesting / cash contribution.” The idea is to sell assets that are currently worth less than basis, recognize the loss on their 1040 and make a cash contribution to a DAF creating an income tax charitable deduction (assuming the taxpayer itemizes). The cash is then invested by the donor's financial advisor. A strategy like this is often used to “endow” the donor's favorite causes – freeing up the cash that would normally be used to make charitable gifts to these causes.
There are many reasons why DAFs have become so popular among clients. To learn more about Donor-Advised Funds, Renaissance Charitable Foundation or additional planning strategies – please contact us at (866) 803-0389 and ask for a consultant.
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EMERGENCY ECONOMIC PROTECTION ACT OF 2008: Creating Charitable Planning Opportunities
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The “Emergency Economic Stabilization Act of 2008” extends provisions from “The Pension Protection Act of 2006” allowing qualifying taxpayers to make tax-free contributions from their IRA plans to qualified charities. The law creates tremendous opportunity for clients and charities alike. During these especially difficult economic times, our clients are seeking sound financial advice...
Click Here to continue reading about how to take advantage of the IRA Charitable Rollover opportunity.
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ADMINISTRATION CORNER:
Bailout Bill Extends Due Date for Form 1099s
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The Emergency Economic Stabilization Act of 2008 (the Bailout Bill) included a provision that extends the time broker/dealers have to issue Form 1099s to their clients from January 31 to February 15.
The affected Form 1099s include Form 1099-B and other reportable items that are included on a consolidated reporting statements. This latter group includes Form 1099-DIV, Form 1099-INT, Form 1099-OID, and Form 1099-MISC to the extent that they are included on a consolidated reporting statement. A consolidated reporting statement is a brokerage firm's annual account information statement prepared for clients that includes tax reporting information.
While this new two-week delay will affect your clients’ personal accounts, it will also affect their CRT or other trust account. Each year, prior to preparation of the annual trust information return and Schedule K-1, Renaissance prepares a year-end account reconciliation. Delays such as this produce a corresponding delay in the completion of the year-end account reconciliation which necessarily produces a delay in the preparation of the trust's information return and Schedule K-1.
While this delay is outside our control, we are making plans to staff the office for extended work hours during the tax season to lesson the impact. Rest assured that we will make every reasonable effort to deliver tax reporting information to trustees and income beneficiaries in a timely manner.
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RENAISSANCE CHARITABLE PLANNING WORKSHOP: Celebrating a Successful 2008
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Renaissance Charitable Planning Workshop wrapped up its 2008 training with a blitz attack on both New York and Las Vegas! Here are some comments from attendees…
- "Best program I have attended in years - Best Program Award!"
- "I really like the new material and format"
- "Kevin jokes, Ted rambles, but both do a great job and keep it entertaining. Good style"
- "It is refreshing to have both presenters with experience and knowledge of all the presentations"
Watch for 2009 dates early next year...
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