Tax Advantages of Giving

Tax planning can be complicated, but our team is here to make your giving simple. At the Community Foundation of Utah we help donors build a tax strategy to decide how much to give, what assets to give, and when to give—so they can provide a maximized charitable gift and receive the maximum tax advantages.

Using a Donor Advised Fund to defer or reduce taxes

By using tax planning strategies with a Donor Advised Fund, charitable contributions can reduce three kinds of federal taxes.

Income tax

Donations to 501(c)(3) public charities qualify for an itemized deduction from income. The tax rate is then applied to a reduced income, which can minimize your overall tax liability.

During a high-income year, you can donate to a Donor Advised Fund to reduce your tax liability and then use the funds to support nonprofits over time. Your original donation will grow tax-free in your fund until you decide to grant it to a cause close to your heart.

Capital gains tax

You can reduce your capital gains tax liability in addition to reducing income tax by donating long-term appreciated assets. Assets subject to capital gains taxes can include investments like stocks or mutual funds, or hard assets like real estate. They can include assets that are both publicly traded or non publicly traded. 

Did you know that Mark Zuckerberg, Jack Dorsey, and many other successful entrepreneurs opened Donor Advised Funds at their local community foundations when they sold their companies? Our team works with business owners to donate shares of their private business before it is sold to dramatically increase their charitable impact.

Estate tax

The federal estate tax is a tax on the transfer of your property at your death. By making properly structured donations, you can remove assets from your estate before the total is tallied and taxed to access an unlimited charitable deduction.

Planning charitable tax strategies for your estate can be complex, so our team works with our donors to create a full giving strategy for their lifetime. We help to identify your giving goals to create an estate gift that best fits your family through Charitable Trusts, Donor Advised Funds, or gifts of retirement assets—among many available strategies.