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Giving Can Be a Challenge

As we close the year and prepare for the holidays, all of us are typically bombarded with messages to give, give, give. All of this is worthy, but when you stop to think about it, giving can be really hard. Thinking about the ‘perfect gift’ for a friend or family member can be exhausting. Figuring out which charity or cause to support can be daunting because there are so many people who do good work to improve our community. Fortunately for me, I have had the opportunity as a member of the Board of Trustees of the Community Foundation of Howard County to learn about philanthropy. As a member of the Foundation’s Grants Committee, I participate in the review and evaluation of multiple applications from various non-profit agencies seeking support from the Foundation. Working with other members of the Grants Committee, we evaluate each proposal in terms of its purpose, budget, and how it fits with the mission of the Foundation: to inspire lifelong giving and to connect people, places and organizations to worthy causes in Howard County. The thorough preparation by the staff of the Foundation has made this task manageable, but the effort to pick and choose among many worthy entities remains considerable. While no final decisions by the Foundation have been made for this year, I am so honored to be a part of this process. Giving can be a challenge.  Happily, the Community Foundation of Howard County simplifies this endeavor. P.S. For most people, I have noticed that chocolate is generally a winner. I hope you receive your perfect gift this holiday...

Gifting: Legal Considerations

It may seem counter-intuitive during the holiday season, but giving gifts to others may generate a tax issue.  The IRS defines a gift as any transfer to an individual where nothing is received in return (the full definition can be found here).  This transfer can be in the form of tangible personal property (stuff), real property (land or a house), or intangible personal property (cash, stocks, and bonds).  Gifts can also be in the form of a charitable donation or a necessary expense. It is important to consider how the federal government assesses these gifts in terms of estate planning. The total amount of a gift from a single individual to a single individual cannot exceed the annual gift tax exclusion for the current calendar year.  For gifting in 2015, and in the upcoming New Year, this exclusion amount is $14,000. This means that a single individual can gift up to $14,000 to one person, without having to pay the federal “gift tax.”   Spouses who choose to give jointly, a “split gift,” may give up to $28,000 to a person during the year without incurring a gift tax. There are no limitations on a donor with regard to the number of people who can receive a gift in a single year.  For example, if a parent has five children and five grandchildren, that parent/grandparent can present each child and grandchild with a gift worth up to $14,000 without having to incur the gift tax.  In this scenario, there are ten individuals who can receive a substantial gift for a hefty total of $140,000 in a single calendar year.  Over...