Now could be the best time to support City Opera House.
Charitable contributions to City Opera House may qualify for additional tax benefits in 2020 under the CARES Act. Tax planning can enable you to have more capacity to give to charity.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief and Economic Security (CARES) Act to help combat the far-reaching impacts of COVID-19. The bill provides increased tax incentives for charitable giving for both individuals and corporations, signifying an intent to stimulate philanthropy throughout America.
The calculation of the deductible amounts can be quite complicated, and careful planning with your tax advisor will be needed to get the full tax benefit. And, as you do your tax planning, consider a gift to City Opera House in your plans.
The change in the tax law provides an incentive
to maximize qualified charitable giving in 2020.
Are you itemizing deductions?
The adjusted gross income (AGI) limit for cash contributions was increased for individual donors. For cash contributions made in 2020, you can now elect to deduct up to 100% of your AGI (increased from 60%).
The CARES Act allows for an additional, “above-the-line” deduction for charitable gifts made in cash of up to $300. Even if you are not itemizing on your 2020 taxes, you can claim this new deduction.
What about IRA Qualified Charitable Distributions (QCD)?
The CARES Act did not change the rules around the QCD, which allows individuals over 70½ years old to donate up to $100,000 in IRA assets directly to charity annually, without taking the distribution into taxable income. (Sponsoring organizations with donor-advised fund programs are not qualifying charities for QCDs.)
However, under the CARES Act an individual can elect to deduct 100 percent of their AGI for cash charitable contributions. This effectively affords individuals over 59½ years old the benefits similar to a QCD; they can take a cash distribution from their IRA, contribute the cash to charity, and may completely offset tax attributable to the distribution by taking a charitable deduction in an amount up to 100% of their AGI for the tax year.
If you’re planning a large donation in 2020, this may be a smart strategy as long as you are between the ages of 59½ and 70½ and are not dependent on existing retirement funds.
The tax information provided is general and educational in nature and should not be construed as legal or tax advice. City Opera House does not provide legal or tax advice. Content provided relates to taxation at the federal level only. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of the information provided. City Opera House disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Have you considered long-term capital-gain property?
You can usually deduct the full fair market value of appreciated long-term assets you've held for more than one year, such as stocks, bonds or mutual funds. And, if you donate stocks or other investments, you pay no capital gains tax.
Donating investments—especially highly appreciated securities—instead of cash can be a very effective and tax-efficient way to support a charity. Generally, if your assets have appreciated in value, it’s best not to sell securities to generate the cash you need for a donation. Contributing the securities directly to the charity increases the amount of your gift as well as your deduction. This can also be helpful if you don’t know the tax basis in the underlying security.
Are you a corporation interested in giving?
The AGI limit for cash contributions was also increased for corporate donors. Corporations can now deduct up to 25% of taxable income (increased from 10%).
Make a gift now, in the 2020 tax year.
GIVE ONLINE OR SEND YOUR CONTRIBUTION TO
City Opera House
PO Box 952
Traverse City MI 49685-0952