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August 2023
Hope you are well and enjoying what’s left of the summer.
Alternative Minimum Tax (AMT)
Only 4 months away, the impending Alternative Minimum Tax (AMT) rule changes on January
1, 2024, is now getting more much-deserved attention.
This is a terrible government decision that puts Canadian charities at risk of losing
millions of donation dollars from AMT because the proposed rule changes will eliminate
some of the tax advantages for people who help the causes they are passionate about.
Despite the gravity of the situation, most of Canada’s Philanthropy community
remains unaware of the significant risk to their fundraising. Less money will
reach charities because generous people will no longer enjoy the same tax benefits.
We are using our best efforts to inform and educate charities, foundations, accountants,
lawyers, investment, and insurance advisors.
We are working with over 60 charities across Canada and have provided two versions of
emails for them to modify and send to donors so that donors can plan accordingly.
If they know about these options, hopefully it will translate into larger current gifts
before Jan 2024.
Both versions were published in the July edition of CharityMATTERS and are available HERE.
It’s not all bad news, the good news is that AMT will have no impact on final
estate taxes where charitable donations can still be used to mitigate 100% of estate
taxes including going back the prior year. That means for every $2 given to
charity, $1 of tax is turned into charity. Using a gift of life insurance can turn
taxes into charity for pennies on the dollar or in a cash flow neutral way.
Here are 4 planning ideas to consider now to take advantage of the changing situation:
- Donate appreciated non-registered public securities (eg stock, mutual funds, ETFs)
in 2023 without AMT impact.
- Pre-fund a private foundation or Donor Advised Fund (DAF) in 2023 using
appreciated securities and make distributions to any registered charities in Canada
anytime thereafter.
- Consider exercising any planned liquidity events (e.g. sale of a business or
investment real estate) in 2023 to avoid increased capital gains tax inclusion and
use charitable donations in 2023 to mitigate the tax.
- Consider meeting with us to learn how to include Strategic Philanthropy in your
estate planning to turn taxes into charity. We can help create more
tax-efficient and cost-effective ways to give charity now compared to using cash,
cheques and credit cards. Our team is available to work with you and your
advisory team on a no-fee basis.
Please be in touch if we can be of help
Forum Magazine
Forum Magazine recently invited me to contribute a regular column for a new section
titled “Strategic Philanthropy”.
Forum Magazine is published by Advocis, The Financial Advisors Association of Canada,
the largest voluntary professional membership association of financial advisors in
Canada, representing more than 17,000 member-clients and 40 Chapters across the
country.
My latest article, published in the Sep 2023 edition, titled “Generosity
Rewarded”, presents four case studies that
explain how our clients converted tax liabilities into generous charitable gifts.
Philanthropy Friday on LinkedIn
I’ve been hosting “Philanthropy Friday” webinars on LinkedIn Live on
alternating weeks from 12:00-1:00 pm EDT.
Our audience has been growing, the most recent Philanthropy Friday episode (August
11th) was a great success with 100’s of advisors and charities
attending.
Our topic “5 Charitable Strategies That Will Make you go
WOW!” was a big hit judging by the emails and DMs subsequently received
from participants.
Click this link to watch it again (or for the
first time).
Hope you can join us for these upcoming sessions:
Friday, Sep 8 - with guest Jim
Ruta, Power Of Platinum co-founder. Insurance Advisors and estate planning
professionals can learn all about including Strategic Philanthropy using Life Insurance
into their professional practices.
Please visit www.PowerOfPlatinum.com for more details.
Friday Sep 22 - with guest Denise
Castonguay, Founder & CEO of Canada Gives. Learn all you
need to know about donor advised funds (DAF) vs Private Foundations
Friday Oct 13 - with guest Tim
Cestnick, Co-Founder & CEO of Our Family Office
Inc. We will discuss end-of-year tax strategies to convert taxes owed in 2024
into charitable donations.
In case you missed an earlier edition of CharityMATTERS, click
here to see every issue.
Let’s Connect
Please connect with me on
LinkedIn to ensure you receive timely announcements, event notices, etc. and let
me know of any special subjects you would like covered or would like to be a guest.
Please be in touch if you have any questions or suggestions.
Thanks in advance.
Mark
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