Eric Zizich:
It’s now time for 4 Your Money. We’re joined by David Nelson of Nelsoncorp Wealth Management. David, thanks for coming in.

David Nelson:
Thank you. Appreciate it.

Eric Zizich:
Now as 2019 wraps up, we’re just a week away. Financial markets have really done fantastic this year. So, where do things stand now?

David Nelson:
It’s been a big year to say the least. We brought along a diagram here as far as to illustrate, as far as what type of year it’s really been. What we see is certainly there’s been gyrations along the way, but the red is real estate and the blue is the S and P 500, both of which are north of 20%. So, it’s been a spectacular year as far as this is concerned. What we want to talk about today, what’s this have to do with charitable giving? Has a lot to do with it. We want people to focus on this as far as possible, using this versus cash. And we’ll get into that here shortly.

Eric Zizich:
Yeah, absolutely. So, tell us a little bit more about how charitable giving affects what we’ve seen in the market.

David Nelson:
So big picture, people are going to give away to charity. People are going to give typically years like this way a little bit more to charity. What we want them to focus on is that if you give away cash, we’re using a married couple in the highest tax bracket, they give $10,000 to charity. They get a $3,700 tax benefit as far as from it. Reduces their taxes by $3,700, whereas if we took a person here, that was also going to give away $10,000, but they were a little smarter about it. They had some assets that really have had a good run and they put in five grand. That’s now grown to 10 grand. They’re going to give that away to charity. They also get a $3,700 deduction, but they avoid $1,190 as far as in tax savings.

David Nelson:
Charities don’t pay taxes. If you have appreciated assets, we might want to consider giving those away to charity. And that’s the example that we’re using here. $1,190, as far as in tax savings, that they enjoyed by giving away an asset versus cash.

Eric Zizich:
And when it comes to gifting those appreciated assets, are there any limitations?

David Nelson:
There are limitations. It depends on again, one’s adjusted gross income. So if it’s cash, you can give away a higher percentage and get the tax benefits today. If you give away appreciated assets instead of 60% over there, it’s 30% over here; however, you can stretch it out over a six year period of time. So, for most people, don’t sweat it. This is what you want to focus on. Here’s the way. We ask people the question all the time, “Would you give away more money if it didn’t cost you anything?” The bottom line, that’s what we’re doing here. We’re giving away more money to the charity and it costs us less as far as to do it.

Eric Zizich:
Well, important to know as we finish our final week of 2019.

David Nelson:
Absolutely. Absolutely.

Eric Zizich:
David, thanks for being in today.

David Nelson:
Thank you. Appreciate it.

Eric Zizich:
And if you missed any of our conversation. We’ll have it all up on OurQuadCities.com.