San Diego Business Journal

Tax Uncertainties Cloud Financial Picture, Charity Outlook

TAXES: Advisers Offer Insight on Various Options By Marion Webb Monday, November 19, 2012

Indeed, the fight is already under way. Several groups, including the Community Foundation of the Holland/Zeeland Area and The Jewish Federations of North America, one of the country’s largest philanthropies representing some 150 Jewish federations, reportedly vowed to fight the measure.

Meanwhile the experts said, they will focus on what’s best for their clients.

“We have clients who are very charitably inclined and we will help them process the annual gifts they make to charitable organizations,” Beamer said.

Rates Will Likely Rise

Even if Congress averts the “fiscal cliff,” economists believe that the capital gains tax rates will likely increase over the next five years, according to published reports.

Beamer said one way to get around the capital gains tax liability is by giving away stock to a charity rather than selling it.

“We do quite a bit of that,” he said.

With the estate tax set to rise from 35 percent — above the $5 million threshold for an individual or $10 million for a couple — to 55 percent with the exemption dropping to $1 million when the Bush tax cuts expire, and if nothing is done, this becomes a big issue for advisers.

“We don’t want our clients to give away their estate, if they might have a need for the assets and want to retain their lifestyle,” said Tobiason. He added, “When we look at charities, the decision-making process is going to be very similar to last year and the year before.”

With clients being inclined to give more when they feel good about their own finances and the overall economy, 2013 may be better than 2012, Tobiason speculated.

“People are more optimistic about 2013,” he said.

Callan, who manages the assets of top wage-earners who have sold companies or accumulated wealth by taking a company public, said his clients tend to give based on their income.

However, he said, most individuals give between $50,000 to $300,000 a year.

“If Obama’s proposal passes, it (the amount of donations) could be cut in half,” Callan projected.

Marion Webb is a freelance writer.

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