The Rivertree leadership team (staff, elders, and trustees) is very thankful for the ongoing financial support provided by the Body to fund ongoing Rivertree ministries. Know that we faithfully steward each dollar in accordance with our mission and core values. This starts with our calling to give 12% of all general offerings toward Go Ministry (Missions) that are local, national, and global.
Individuals give on Sunday morning with check or cash but also can donate through your bank’s “bill pay” system as a reoccurring payment or periodic payment.
Additionally, some individuals give stock or mutual funds through Rivertree’s brokerage account. Whether you give to the General Fund or a designated account such as the Building Fund, know that the Rivertree leadership team will diligently steward the resources.
To assist you in considering alternative giving options, we have developed some questions and answers as general guidance. You can find this information below.
When making donations to the church there are some methods available that are more tax efficient than simply writing a check. Tax efficiency is when you achieve the desired financial impact to Rivertree Church while maximizing the tax savings. The following are general guidelines to consider when planning your charitable giving.
Giving From a Retirement Account
Are you or your spouse over 70 ½ years old with an IRA or other tax deferred retirement account?
You can donate up to $100,000 per year from your retirement account directly to Rivertree and pay zero tax on the distribution. This is referred to as a Qualified Charitable Distribution (QCD). In addition to not paying tax on the distribution, you will not be able to deduct the contribution if you itemize deductions (no income or deduction). There are other advantages such as lower Adjusted Gross Income (AGI) which is used in computing your taxable Social Security benefits, lower AGI when computing your Medicare Part B premiums, and lower AGI when computing net investment income tax. Additionally, if you are subject to required minimum distributions (RMD) this contribution can be used to meet your RMD.
Excerpts From IRS Website:
What is a Qualified Charitable Distribution?
Generally, a qualified charitable distribution is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. See Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) for additional information.
Can a qualified charitable distribution satisfy my required minimum distribution from an IRA?
Yes, your qualified charitable distributions can satisfy all or part the amount of your required minimum distribution from your IRA. For example, if your 2018 required minimum distribution was $10,000, and you made a $5,000 qualified charitable distribution for 2018, you would have had to withdraw another $5,000 to satisfy your 2018 required minimum distribution.
How are qualified charitable distributions reported on Form 1099-R?
Charitable distributions are reported on Form 1099-R for the calendar year the distribution is made.
How do I report a qualified charitable distribution on my income tax return?
To report a qualified charitable distribution on your Form 1040 tax return, you generally report the full amount of the charitable distribution on the line for IRA distributions. On the line for the taxable amount, enter zero if the full amount was a qualified charitable distribution. Enter “QCD” next to this line. See the Form 1040 instructions for additional information.
You must also file Form 8606, Nondeductible IRAs, if:
- You made the qualified charitable distribution from a traditional IRA in which you had basis and received a distribution from the IRA during the same year, other than the qualified charitable distribution; or
- The qualified charitable distribution was made from a Roth IRA.
Giving stocks, bonds, real estate, and other appreciated assets
Can I donate stock or other appreciated assets?
Yes, this is often very advantageous for the donor. If you donate appreciated assets such as publicly traded stock you hold in a taxable account, you receive a deduction when itemizing your contribution for the fair market value of the stock. But you pay zero tax on the gain!!
For Example:
For example, you own APPLE stock valued at $10,000 that you purchased several years ago for $2,000. You have an unrecognized gain of $8,000. If you donate the stock directly to Rivertree you generate a $10,000 donation and zero tax (the gain is never taxed).
Alternatively:
Alternatively, If you were to sell the stock and donated the net proceeds you would only make a donation of approximately $7,000. This is because you would have tax of about $3,000 (approximate 30% total tax burden: Federal of 25% and 5% Alabama tax).
So, donating the appreciated stock directly makes an impact of $10,000 (Rivertree pays no tax when liquidating the stock).
Excerpts from IRS Website:
Form 8283
You must fill out one or more Forms 8283, Noncash Charitable Contributions and attach them to your return, if your deduction for each noncash contribution is more than $500. If you claim a deduction of more than $500, but not more than $5,000 per item (or a group of similar items), you must fill out Form 8283, Section A. If you claim a deduction of more than $5,000 per item (or a group of similar items), you must obtain a qualified appraisal of the item or group of items and fill out Form 8283, Section B. If you claim a deduction of more than $500,000 for a contribution of noncash property, you must fill out Form 8283, Section B, and also attach the qualified appraisal to your return.
Donating Automobiles, Inventory, and Other Specific Property
Special rules apply to donations of certain types of property such as automobiles, inventory, and certain other readily valued property. For more information, refer to Publication 526, Charitable Contributions. For information on determining the value of your noncash contributions, refer to Publication 561, Determining the Value of Donated Property.
Farmers
Can I donate grain?
Farmers can donate grain to the church and pay no tax on the disposition of the grain. They deliver directly to the grain elevator and simultaneously transfer to the church and the church immediately liquidates. Benefit to the farmer is they never pay tax on the grain saving Federal, state, and self-employment taxes (could be upwards to 50%).
Other Resources
Charitable Contributions: Looking Beyond Cash for the Right Asset to Give (Podcast)
Want to talk to someone?
There are several individuals on our Trustee Team available to provide more specific answers to questions you may have. If you would like to meet with a Trustee, please email our Administrative Pastor, Scott Weeks.
Everyone’s giving passions and financial circumstances differ, so we always recommend you consult with your financial and/or tax advisor when developing a giving plan.
Disclaimer
The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant.
Any U.S. federal tax advice contained in this website is not intended to be used for the purpose of avoiding penalties under U.S. federal tax law.
IRC Circular 230. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (I) avoiding penalties under the Internal Revenue Service (II) promotion, marketing or recommending to another party any transaction or matter addressed herein.