Gifts of Cash

Gifts of cash can be deducted against a larger portion of your taxable income than can gifts of appreciated assets. Cash is the simplest donation and provides us immediate benefits. Your gift can be made outright or fund one of our life income arrangements.

The IRS allows you to claim charitable deductions for gifts of cash up to 50 percent of your adjusted gross income ("AGI" -- the figure at the bottom of the first page of Form 1040. See glossary for full definition). Alternately, if you use appreciated property instead of cash to make your gifts, you can claim deductions up to only 30 percent of AGI. Although excess deductions may be claimed over the five years after the gift is made, if you are looking for substantial immediate tax deductions you may be better served giving cash instead of property:

For charitable gifts of cash, the IRS allows you to claim up to 50% of your adjusted gross income ("AGI"). However, for charitable gifts of appreciated assets, you may deduct up to only 30% of AGI in any one year. The good news is that with both types of gifts if you cannot use all of the deduction in any one year, then you may carry over any remainder for the next five years. We have illustrated this below.

Gift of:

Cash

Appreciated Assets

Donor's AGI

$300,000

$300,000

Amount of gift

$200,000

$200,000

Total charitable deduction

$200,000

$200,000

Deductible against % of AGI

50%

30%

Deduction in first year

$150,000

$90,000

Net taxable income, first year

$150,000

$210,000

Net tax in first year @35% rate

$52,500

$73,500

Carryover deduction

$50,000

$110,000


*This example is based on income tax rates that can change yearly. Contact our office for a personal illustration based on the latest rates.


If you are considering a gift of cash, email us, complete the personal illustration form, or call us at 212 377 4900 so that we can assist you through every step of the process.