Charitable Planning as a Triple Threat to the Tax Code
In basketball, a player is known to be in a “triple threat” position when he or she is holding the basketball and in an athletic position with the ball, ready to (i) pass to a teammate, (ii) dribble drive to the basket to score, or (iii) immediately shoot a jump shot. In my past years of playing basketball, I possessed neither a good jump shot nor the quickness necessary to dribble drive to the basket. In my case, the triple threat position was simply the means to pass the ball to a more capable teammate.
In tax planning, a charitable gift of assets might pose a “triple threat” to the tax code through one or more of three separate benefits. These three tax-related benefits are as follows:
- An immediate income tax charitable deduction;
- Avoidance of future capital gains or future ordinary income tax liability; and
- Avoidance of future estate tax liability.
In this month’s update, I briefly summarize how a donor can implement a charitable strategy to make use of one or more of these three benefits.