Three Tips on Timing Your Year-End Charitable Gift

Posted October 2017

Now that the leaves are falling, it’s high time to think about your year-end charitable gifts—and to make sure that you time them to your best advantage. The end of the year is the most popular time for charitable gifts partly because it’s the “giving season” and partly because donors are running out of time to take advantage of the 2017 tax benefits of their generosity. Here are timing tips for:

  1. Gifts of securities
  2. Gifts of mutual funds
  3. Gifts by check

1. Gifts of securities
Securities are among the most popular assets for making charitable gifts. The rules for transferring securities, while not complicated, are strict. If you plan to take a charitable deduction on this year’s tax return, you will want to be careful to execute your transaction so as to complete your gift to us this year.

Remember that the amount of your tax deduction depends on the value of the securities at the time the gift is completed. Choosing the date to complete your gift can make a difference in the amount of your deduction. Practical tips:

  • If you hand-deliver a properly endorsed stock certificate or an unendorsed stock certificate and a properly endorsed stock power, the gift is effective on the date we receive it.
  • If you deposit these documents in the mail, the postmark constitutes the date of the gift. It is important to send the stock certificate and the stock power separately when sending securities through the mail.
  • If your securities are held in a brokerage account, ask the broker to call us for instructions and then transfer stock from your account to a temporary account in our name. The gift is effective when the stock is transferred from your account. After receiving instructions, a broker can usually complete the transfer electronically.
  • The broker must call us for instructions in order to ensure that the valuation of the gift—and therefore your charitable deduction—takes effect on the proper date.

2. Gifts of mutual funds
As the donor, you can write a letter or complete a form provided for vouchers that instructs the fund’s transfer agent to transfer shares to an account established for us. Your signature should be guaranteed. The date of the gift is the date the shares are credited to our account.

3. Gifts by check
The effective date of your charitable contribution is the day you mail or hand-deliver the check to us, provided you have placed no restrictions on its cashing. A check dated December 31 and mailed and postmarked on that date is deductible this year. It does not matter that we receive the check in the new year or that it is actually charged to your account in January. Note: If your check is mailed in December but postdated so that it cannot be cashed until January—or if it is dated in December but not mailed or handed to us until January—then it cannot be deducted on this year’s return.

We are here to help
If you have questions about the proper way to transfer any type of asset, please don’t hesitate to contact us. We will be happy to assist you in making an effective transfer to ensure your deduction this year. All inquiries are kept strictly confidential.

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