Maximize Your Charitable Giving

Many investors give back to their communities through traditional monetary gifts. But other gifting strategies may help maximize the value of your generosity and provide tax advantages. Four strategies that may be worth exploring:

1. Gift highly appreciated stocks or other assets
   
   If you hold stocks or other investments for more than one year that have gained value, you may consider liquidating the asset to make a charitable donation with the proceeds. However, doing so may result in a taxable long-term capital gain. Giving appreciated stock directly to a qualified charity may be a more efficient way to maximize the value of your donation. Ensure that the charity accepts this type of donation before exploring it as a financial strategy.
   
   
2. Establish a charitable trust
   
   Another way to consider gifting assets is to set up a charitable trust. Trusts can help you manage highly appreciated assets in a more tax-efficient manner, in some cases, allowing you to split assets among charitable and non-charitable beneficiaries. The timing of each gift and the flexibility you want dictates the type of trust that works best. With a Charitable Lead Trust, a charity is funded with income from assets placed in the trust for a specified time period. After that time, the remaining assets revert to other named beneficiaries. In a Charitable Remainder Trust, the reverse occurs. The trust makes regular payments back to you or another beneficiary. After a period of time specified in the trust, the remaining assets are directed to the named charities. A donor-advised fund allows you to make a large donation that may be immediately deductible from taxes, but gives you flexibility to recommend gifts to charities spread out over the years.
   
   
3. Maximize donations through your employer
   
   Your employer may offer the convenience of making contributions through payroll deductions, allowing you to give systematically with each paycheck. In addition, your employer may match a certain donation amount, which can add to the impact your gift makes. Check to see if the charities you care about are eligible for this type of donation.
   
   
4. Make a charitable individual retirement account (IRA) donation
   
   If you have reached the age at which you are required to take distributions from your traditional IRA each year, but you don’t need the money to meet your essential and lifestyle expenses, you may prefer to avoid the resulting tax bill. The Qualified Charitable Distribution rule allows you to transfer funds directly from your IRA to a qualified charitable organization. By doing so, you may avoid having to claim income (and subsequent tax liability) since you would not receive the required distribution. To determine when required distributions will start for you (based on your birth year), visit IRS.gov.

As you consider these strategies, consult with your financial advisor and tax advisor, who can help you evaluate the choices to ensure the gifts you make are most effective for your goals and consistent with your overall financial plan.

MICHAEL W. K. YEE, CFP,® CFS,® CLTC, CRPC®
1585 Kapiolani Blvd., Ste. 1100, Honolulu, HI 96814
808-952-1240 | michael.w.yee@ampf.com
ameripriseadvisors.com/michael.w.yee
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Private Wealth Advisor, Certified Financial Planner™ practitioner, with Ameriprise Financial Services, LLC ,in Honolulu, HI. He specializes in fee-based financial planning and asset management strategies and has been in practice for 40 years. Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements. Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value. Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser. Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC. ©2025 Ameriprise Financial, Inc. All rights reserved.