In our roundup for professional advisors, we explore charitable gift annuity, scams to beware of during tax season, gifts of real estate and more. Read below to stay in-the-know on industry news.
Roundup for Advisors
Personal Planner: Gift Tax Surprise
Following the passage of the estate tax, Congress realized that a gift tax is also necessary. If there were no gift tax, creative CPAs and estate attorneys would urge their clients to make deathbed gifts. Rather than waiting until they pass away and paying estate tax, if there were no gift tax the transfer tax could be entirely avoided by making death-bed gifts.
This article outlines what individuals need to know about the gift tax and how it could impact their children, grandchildren and other heirs.
Washington News: Senators Introduce New CHARITY Act
On May 15, two U.S. Senators introduced the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act. The bill expands giving options for IRA charitable rollovers and addresses other charitable provisions. If passed, it would generally permit donors over age 70½ to transfer up to $100,000 per year directly from an IRA to a donor advised fund. Second, the act would simplify the excise tax paid by private foundations on investment income.
Article of the Month: Substantiation Requirements for Charitable Contributions
The Internal Revenue Service requires donors who claim charitable income tax deductions to substantiate the value of their charitable contributions. Donors may not understand the specific substantiation requirements when making charitable donations. The Service’s substantiation rules are strict, and if these rules are not closely followed, a donor may lose his or her entire charitable deduction.
Economic News: Treasury’s Rise on Strong Consumer Sentiment
U.S. Treasury yields rose near week’s end following the release of optimistic economic indicators. Rising consumer sentiment and strong housing numbers emerged to boost yields. The University of Michigan recently released its latest Index of Consumer Sentiment. The index reached a 15-year high of 102.4. Analysts expected the index to hit 97.5 this month. Optimism over the reading was tempered, however, by the ongoing trade tensions between the U.S. and China.
The article is a series that will shed light on the substantiation requirements for specific gift types, including donations of real estate, stock and tangible personal property.