Challenge, Meet Solution: A Guide for Financial Advisors

Tax, Estate, and Other Wealth-Planning Challenges

Private foundations can be used to address a broad range of wealth-planning, philanthropic, and even personal challenges. In this guide, we will examine how a private foundation may be the key to unlocking a host of important benefits for your clients.

Funding a foundation or donating to one during a high-income year may entitle your client to a charitable income tax deduction as high as 30% of Adjusted Gross Income (AGI) for the year in which the cash donation is made to the foundation. There is a five-year carry-forward for contributed amounts that exceed this limit. For donations of non-cash assets, the cap is 20% of AGI.

Publicly traded stock can be donated directly to a private foundation and provide a fairmarket-value charitable income tax deduction without triggering capital gains taxes. Once in the foundation, these assets can be held or converted to a diversified, managed portfolio.

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