Choosing the Assets You Give to Charity
If giving is already part of your plans, the account you use can affect the tax treatment. Compare cash gifts, appreciated investments, and eligible IRA distributions before making a transfer.
October 12, 2026
If you already support a charity, it is worth reviewing which assets to use for the gift. Cash may be straightforward. An appreciated investment or an eligible IRA distribution may receive different tax treatment.
Begin with the amount you can afford and the organizations you want to support. A tax benefit should be considered alongside your own income needs and the charity's ability to receive the asset.
Consider an Eligible IRA Distribution
A qualified charitable distribution, or QCD, is an eligible transfer from an IRA directly to a qualifying charity. The owner must be at least age 70½ when the distribution is made. For 2026, the annual exclusion limit is $111,000 per eligible individual.
An eligible QCD can count toward a required minimum distribution. The excluded amount cannot also be claimed as a charitable deduction. Not every IRA or recipient qualifies, and deductible IRA contributions after age 70½ can affect the available exclusion.
Ask the custodian to arrange the transfer and confirm the charity's eligibility. Donor-advised funds are not eligible recipients of ordinary QCDs. Keep the acknowledgment needed for tax reporting and tell your preparer that the IRA distribution included a charitable transfer.
Compare a Gift of Investments With a Sale
Selling appreciated securities can create a taxable gain. Donating eligible long-term appreciated securities directly may avoid recognizing that gain, while potentially allowing an itemized deduction subject to the applicable rules.
The deduction depends on the asset and recipient, as well as valuation and income limits. A gift of property that has declined in value may call for a different approach. Ask your tax advisor to compare the alternatives before transferring it.
Contact the charity early. It may have specific instructions for receiving shares, and the completed transfer date can matter. Avoid assuming that a request submitted near year-end will be processed in time.
Decide Whether a Donor-Advised Fund Fits
A donor-advised fund is maintained by a sponsoring charity. You make an irrevocable contribution and may recommend grants over time. The sponsor has legal control of the assets and applies its own grantmaking policies.
That arrangement may help organize giving when income varies or when you want more time to choose recipients. Consider its fees, investment options, and restrictions. Money contributed is no longer available for personal spending.
Combining planned gifts in one year can affect itemized deductions. Whether that helps depends on the current deduction rules and your return. Your tax professional should evaluate the contribution year as well as later years in which you expect to give.
Review the Current Deduction Rules
For 2026, itemizers generally face a charitable-deduction floor of 0.5% of adjusted gross income. Eligible non-itemizers may deduct qualifying cash gifts up to $1,000, or $2,000 on a joint return. Restrictions apply, including limits on eligible recipients.
These provisions do not make every gift deductible. The benefit can also differ from the value transferred. Ask your preparer to confirm what documentation is needed and how the proposed gift affects the return.
Coordinate Lifetime and Estate Gifts
If your estate plan includes a charity, review which asset will fund that gift. An IRA beneficiary designation, a trust provision, and a gift made during life can produce different results.
Confirm the organization's legal name and intended use of the funds. Include your attorney when a gift changes estate documents or involves business interests. A charity's acceptance policy may also require advance discussion.
What This Means For You
- Confirm the gift fits your own spending and reserve needs.
- Compare tax treatment before selling or transferring an appreciated asset.
- Arrange IRA gifts directly with the custodian.
- Review deduction rules and documentation with your tax preparer.
Thiesen Dueker's community involvement includes local fundraising and service events. In a personal giving plan, our role is to discuss how the assets you give fit your financial needs and the causes you choose.
Bring your intended gifts to your next advisor conversation so there is time to coordinate the transfers.
To speak with Thiesen Dueker, visit thiesendueker.com or call (559) 448-8190.
Frequently Asked Questions
Can a qualified charitable distribution satisfy an RMD?
An eligible QCD can count toward the IRA owner's required minimum distribution. The transfer must meet the IRA and charity requirements.
Can I give appreciated shares instead of cash?
Many charities accept securities. Tax treatment depends on the property, holding period, recipient, and deduction rules, so arrange the transfer with the charity and your tax advisor.
Who controls a donor-advised fund contribution?
The sponsoring charity controls the contributed assets. You can recommend grants under its policies, but the contribution is irrevocable.
Sources
Important Disclosures
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA/SIPC.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Investing involves risk including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This material was prepared for Thiesen Dueker's use.
Ways to support the causes you care about while considering how the type of gift affects your taxes.
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