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Year-end tax planning

Everyone has a lot to be thankful for this year. We are fortunate to live in this vibrant and beautiful community of Fallbrook.

Now let me give you some ideas on year-end tax planning issues to consider. First of all, there are only three places your wealth and legacy can go, including: the government in taxes, your family and charities. If you have enough for your family and I know no one wants to give to the government as they already have taken their share, the logical answer is to give it to worthy charities.

I am now going to give you some ideas on how to do that and give you some tax advantages also. When we are gifting funds, we look for highly appreciated assets, stocks, bonds, real estate, jewelry, artwork, cars, boats or any other asset that has appreciated in value.

When you donate the item directly to a charity who sells the item for you, you will not have to pay the capital gains tax due if you had sold it for a profit. Next, you will get a tax deduction for the value of the asset gifted.

If you are over age 70 1/2, you can also gift directly up to $100,000 from your IRA directly to a charity without increasing your ordinary income, which occurs when you take funds out of an IRA. If you are subject to taking required minimum distributions, the amount given to charity will count as part of your RMD requirement.

If you are 72 and must take the RMD from your IRA’s value as of Dec. 31, 2021, you can take it yourself, and if you are in a high tax bracket, you will in effect pay 50% of that RMD in taxes. Instead, you could gift the RMD directly to the charity and 100% of that distribution is nontaxable. In essence, keep 50% or give away 100% of your RMD.

I am not a tax professional, and you should always get advice and guidance from your tax consultant, CPA, attorney or other qualified tax professional.

I ask all of you to consider giving some of your hard-earned wealth to charities of your choice, such as The Boys & Girls Club of Fallbrook Foundation.

For more information, contact Jean Larsen, CEO of Legacy Endowment, at 858-774-2152; Chad Wauschek, CPA at Pathway Consultants, at 951-340-1854 and the undersigned at 760-518-9291

Jon C. Frandell


The Boys & Girls Club of Fallbrook Foundation


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