CAT’s mission is to work with our community to save the lives of homeless, sick and injured cats and kittens by offering shelter, adoption, foster, hospice, and veterinary services to end needless feline euthanasia in our community.
If you’re 70½ years and older, you have an opportunity to donate funds from your individual retirement account (IRA) directly to CAT without incurring income tax on the IRA funds withdrawn. But those who are eligible must act quickly - before December 31, 2009.
The IRA Charitable Transfer allows those who are 70½ years and older to direct up to $100,000 of their IRA to charity without those funds being counted as part of their income. So, while there is no charitable deduction for the funds transferred to the charity (because they’re not counted as part of your income), neither will the withdrawal raise the rate at which the rest of your income is taxed.
There is a hitch: according to the wording of the Pension Protection Act, it’s not enough that the transfer occurs during the year a person turns 70½. To qualify, the transfer must occur on, or after, the date you actually are 70½. And, to take advantage of this opportunity, funds must be transferred directly to the charity without the donor taking possession of them at any time. Other restrictions apply. If you are interested in this opportunity to support CAT’s mission, please contact your tax advisor.
If you are holding an investment because you believe it still has upside potential and do not want to sell it, consider donating the security to CAT and then re-purchasing it. By doing so you avoid paying capital gains tax on profits to-date and get a tax credit for the donation. You will also have “stepped up” the adjusted cost base of your investment, reducing capital gains and associated tax when you sell the investment.
If you own securities that have depreciated since purchase, consider triggering a capital loss by selling one or more “underperformers” and donating the cash proceeds to charity. With this strategy, you get a tax credit for the donation and you also generate a capital loss. This, in turn, can be used to offset other capital gains in the current year or in the past three years, or may be carried forward indefinitely.
In short, some advantages of donating stock are:
Please contact your tax advisor for specific details about donating stock to CAT.
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