CHARITABLE GIVING

Anita and Joe Mazzarello had acquired a nice estate thanks to Joe’s shrewd investment in several commercial and residential properties in their area and some lucky picks in the stock market. They were both very active participants in their local YMCA and they made an annual contribution to the fund-raising campaign. They had been talking to their attorney about some estate planning strategies, mostly centered around gifting assets to their children. Anita and Joe both liked this idea because it gave them the opportunity to see the benefits of their generosity while they were alive and well. But the attorney suggested they go one step further. How about doing some substantial gifting to the YMCA, now? That generosity would have many benefits all around: income to Joe and Anita, a current income tax deduction, and a deduction for their estate when they passed on. And it would save a huge amount of capital gains taxes later on. The Y would receive a very large gift and would be able to show their appreciation to the Mazzarellos now. If the gift were one of the commercial properties Joe had in his portfolio, the Y could sell the building and take the full proceeds without paying any taxes, a feat Joe could never pull off! Seems like a "win-win" deal. Is it?