Planning for Year-End Gifting and Distributions

With the end of the year quickly approaching, we are sharing reminders on planning opportunities and recommended deadlines to ensure we help accomplish your goals before year end.

Planning for Year-End Gifts

• Consider gifting long-term appreciated stock to charity to receive a deduction for the fair market value of the donation while avoiding tax on the capital gains. If appropriate, the stock can be repurchased to maintain exposure but reset cost basis.

• Consider opening a Donor Advised Fund (DAF) to facilitate gifts of long-term appreciated stock. Individuals receive a tax deduction equal to the Fair Market Value (FMV) for the year of contribution to a DAF, while retaining the ability to make cash grants to designated charities over a multi-year or decades-long time frame.

• If you are at least 70 ½, you are eligible to take advantage of an additional method of gifting from your IRA directly to a charity, termed a “Qualified Charitable Distribution” (QCD). QCDs are allowed up to $100,000 per year and offset your RMD requirement, thereby lowering your Adjusted Gross Income for the year. A reduced gross income may expand your eligibility for certain tax credits and deductions. A reduction may also decrease your future Medicare premiums, which are calculated using the Adjusted Gross Income reported on your tax return from two years prior. If you’d like more information on how to make a QCD, please contact your Woodmont team.

• For gifts to friends and family, take advantage of the opportunity to exclude from the estate exemption limit up to $17,000 per year to an individual. Couples may contribute $17,000 each for a total of $34,000 to one individual. If you think you may have a taxable estate, this is a great way to start getting cash, stock or 529 funds to children and grandchildren that would otherwise be subject to estate tax.

CAUTION: Donations related to the right to purchase athletic tickets are not tax deductible. Please consult your CPA if you plan to make a gift to an athletic institution.

Planning for Year-End Distributions

Beneficiaries of an inherited account

• If you inherited a tax-deferred retirement account after 2019, you may save on your total tax burden by spreading the distributions over time rather than taking the full distribution in a lump-sum within the 10th year. If want to understand all your options on a post-2019 inherited IRA account, please contact your Woodmont team.

Retirement account owners

• If you’d like to change the tax withholding on your IRA distributions, please contact your Woodmont team.

• If you are 72, still working, and do not own more than 5% of your company, you may be able to avoid the RMD requirement on your employer-sponsored retirement plan.

Lastly, if you will need additional cash to make a 4th quarter estimated tax payment (due January 16th), please notify your Woodmont team.

We recognize this is a lot of information. We are available to answer any questions you may have regarding your investments and financial planning goals. We look forward to hearing from you.


The Woodmont Team

October 25, 2023

This document contains general information only and is not intended to be relied upon as a forecast, research, investment advice, or a recommendation, offer, or solicitation to buy or sell any securities or to adopt any investment strategy. The information does not take into account any reader’s financial circumstances or risk tolerance. An assessment should be made as to whether the information is appropriate for you with regard to your objectives, financial situation, present and future needs.

The opinions expressed are of the date of publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Woodmont to be reliable, are not necessarily all inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to fruition. Any investments named within this material may not necessarily be held in any accounts managed by Woodmont. Reliance upon information in this material is at the sole discretion of the reader. Past performance is no guarantee of future results.