Does the US let you forego capital gains taxes on unrealized gains when you donate stock, along with whatever benefit you get from donating money?
As a salaryman, I wish I got to donate pre-tax amounts! I get some credits, but if your income is high enough, it doesn’t even cover the taxes already paid.
Yes, donating stocks does not trigger a taxable event (YMMV, consult your tax attorney, etc). Not sure if it is possible to figure out how to donate pre-tax income (vs pre-tax gains). If you do, please share your knowledge.
> Not sure if it is possible to figure out how to donate pre-tax income (vs pre-tax gains)
Tax-efficient to get employers to donate money to charities of the employee's choosing in their honor maybe? Probably some opportunity for a startup here.
But I can see some employers not being too happy being linked with some of the choices, or employees being unhappy some of their favorites aren't on the list.
This only works for the first dollar after the you stop taking the standard deduction.
For most people, the standard deduction is freaking huge now due to the changes under Trump - for married couples in 2024 it will be $29,200.
So you have to have deductions that equal almost $30k before they start to "matter". If your itemized deductions would be about $10k (mortgage interest, perhaps, SALT, etc) you would have to donate $20k before you would start to see some effect from the donations.
There are still some ways to do pre-tax donations even without that, but you may have to involve estate-planning trickery.
Yes. You deduct the FMV, not the basis. There are some limits on deductions, especially when giving to foundations you control. But you can be sure that the donor has been well-advised on matching up this enormous deduction with similarly-sized realization events (i.e., selling other assets and generating taxable gains).
Yes, donating stock means you avoid capital gains. But even more relevant in this case is that she likely inherited the Berkshire stock from her husband which also resets the cost basis which means she wouldn't have had to pay capital gains even if she had sold the portfolio instead of donating.
I don't know enough about US tax law, but I think it's more likely the donation was somehow done without triggering a huge capital gains tax bill. We're talking about a nonagenarian billionaire that founded an investment house.
Their death could be no surprise and the accountants/lawyers on speed deal would be limitless.
Surely they had their books in order, unless they wanted to pay tax.
As a salaryman, I wish I got to donate pre-tax amounts! I get some credits, but if your income is high enough, it doesn’t even cover the taxes already paid.