Closehaul Capital Advises A Smarter Way to Give Through Charitable Gift Financing
May 16, 2023
Discover the many benefits of charitable gift financing and how it can help you make a lasting impact on the world.
Miami, FL - May 16, 2023 —
Charitable gift financing is a way to make a significant charitable gift without selling assets or incurring capital gains taxes. It involves taking out a loan and donating the proceeds to a charity. The donor then invests the tax savings. The investment will outpace the interest on the long term loan. As a result, the donor will have additional retirement income and the charity receives a larger donation. The goal of Charitable gift financing is to increase charitable giving while providing a secondary retirement for the Donor. With the use of low interest leverage a Donor is able to significantly increase their net worth through the investment of the Tax Savings. Speak with your CPA and Financial Advisor to run the Future Value models to compare the growth of the Tax Savings vs the Interest and gift amount.
Here's how it works:
- The donor obtains a loan from a financial institution or private lender.
- The loan proceeds are donated to the charity organization.
- A tax deduction for the gift's total amount in the year it is made is received.
- The donor invests the tax savings and the growth outpaces the interest to provide additional income to the donor in retirement. Typically the loan is repaid after 30 or 40 years allowing your investments to grow past the loan amount. Think of it like a secondary retirement plan.
Charitable gift financing can be complex, so working with a qualified CPA and Financial advisor who is an essential step before undertaking a complex financial transaction. In addition finding the right lender for your specific income and assets is another important step in this strategy. Certain restrictions or limitations may exist on the charitable gift's deductibility, and risks are associated with taking on debt to make a charitable gift.
Who can use charitable gift financing? Charitable gift financing is typically used by high-income individuals who want to make a large charitable gift but don't want to sell their assets to do so. We suggest reviewing this strategy if you pay taxes on 300k of income of more.
How much can I deduct? The amount of the charitable deduction is the cash amount donated to the Charity. Your deduction is listed on line 11 of the Schedule A on the 1040 tax return.
Charitable gift financing is a good way to grow overall Charitable Giving.
In addition, charitable gift financing can help charities attract new donors who need help to afford to make a large donation outright.
By offering donors the opportunity to make a larger donation now and pay it off over time, charities can make it easier for more people to give back.
Finally, charitable gift financing can help charities build their endowments. An endowment is used to generate income for the charity in perpetuity. By receiving donations through charitable gift financing, charities can grow their endowments and ensure that they have a steady stream of income to support their work in the future. Overall, charitable gift financing is a valuable tool for charities and donors alike.
Considering making a charitable gift? Talk to an Investment Firm, CPA or financial advisor about whether charitable gift financing is right for you.
About Closehaul Capital
Our experienced professionals are dedicated to helping you achieve your financial goals. We take the time to understand your unique situation and tailor our services to meet your individual needs. Whether you're planning for retirement, saving for your child's education, or starting a business, we are here to help. Let's get started on a brighter financial future for you. Contact us today to schedule a consultation.
Contact Info:
Name: Michael Diyanni
Email: Send Email
Organization: Closehaul Capital LLC
Address: 66 West Flagler, Suite 900, Miami, FL 33130
Phone: (305) 330-1459
Website: https://www.closehaulcapital.com/
Release ID: 89097655
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