10 Non Cash Giving Ideas to Lower Taxes

Shawn: Tired of your precious metals and valuables just sitting around collecting dust? Want to make a difference while also lowering your taxes? In this episode, we’ll explore 10 creative non-cash giving ideas that can help you bless others, leave a legacy, and reap the rewards of generosity. Let’s get some perspective. Welcome to Christian Financial Perspectives. We’re so glad you joined us today while we cover “10 Non-cash, Giving Ideas to Lower Taxes”. Now giving releases, selfishness, giving helps people, giving creates a legacy. Giving is a blessing, and giving lowers taxes, which I’m sure is probably half or more of the reason why people might’ve tuned into this video episode. Bob: Well, they might’ve tuned in also Shawn, because non-cash giving, most people don’t think about that, but yet 90% of what we have possession of is not in cash. Shawn: That’s right. And that’s even more so the older you are. Bob: Yeah, it sure is. So we’re going to cover some really unique ideas today. And there’s an old saying when it comes to giving, “You reap what you sow,” and giving is a principle where you can sow into helping others while also lowering your taxes, which is a benefit and doing something of great significance in reaping those many benefits from it. Shawn: That’s right. So before we go any further, we’re going to go over our first scripture, Acts 20:35, “And everything I showed you that by working hard in this way, you must help the weak and remember the words of the Lord Jesus that he himself said, ‘It is more blessed to give than to receive.’” Bob: Shawn, many, many blessings come from giving. People don’t realize that, but it does. Try it. You’ll see it. It’s amazing what happens. So today we’re going to look at these 10 non-cash giving ideas for lowering taxes and for helping others. And you’re hearing this correctly. This is not about giving from what you have in cash, but it’s from the other 90% of what you could control to help others. Shawn: That’s right. And it’s crazy. Some of the numbers and statistics, I know we in one of our recent Kingdom Advisors Bible studies that it was actually talking about, what was it, 80-90% of giving is from cash, but yet cash as in your income, not your other assets only accounted for, what was it like 10 or 20% of available assets? It was crazy how flip flopped the numbers were that almost all the giving is coming from cash, but yet cash represents such a small percentage of potential assets. Bob: Alright, so here’s the first idea. The first idea is how about giving some of those precious metals that’s been sitting around doing nothing, not making anything, it’s not making any dividends. How about giving some gold or some of that silver or even some old diamonds away and helping somebody, a food bank or helping your church or a local senior citizen center. There’s just so many things, Compassion International, which we love around here. Shawn: That’s right. And if you are going to do that, we would definitely recommend for the gold, silver, the diamonds, whatever it might be. Definitely check around with multiple brokers because you might get a good broker that’s only charging you 3-5% commission or you get one that’s charging you a whole lot more, 10% or more. So that would be the first thing is definitely shop around. Bob: Like that story. And this one of our clients, he said, I could tell the story, I’m not going to say his name, but he inherited right at a million dollars in gold from his dad that his dad had bought about 15-16 years ago or more. Shawn: He inherited what his dad paid a million dollars for. Bob: And this was 15 or 16 years ago. And he’s gone to five or six different brokers and not been able to get over $900,000 to $950,000 for that. Okay. Shawn: Now for those of you at home that don’t have their calculator handy, that’s not a positive return. Bob: No, It’s not. Yeah. Shawn: It’s not even close to keeping pace with inflation either. Bob: You have to look at that. If you are going to give away gold or silver, definitely do it in a way that… maybe set up a donor advised fund and give it to the donor-advised fund and let them find the best buyer for it. Shawn: Right. So number two, on these non-cash giving ideas, giving any type of real estate, any type of land you own from say a quarter of an acre or maybe a hundred acres or more, you can carve some of that off to help others and to lower taxes. Bob: And I know a lot of people, they would’ve bought an old lot somewhere and it might just be that quarter of an acre and it’s just sitting there doing nothing. It’s costing ’em taxes every year. And they could turn this into living water. Shawn: You could also look at for real estate, residential homes, condominiums, apartments on the commercial side, if you have office buildings, professional office buildings, and the final one really would be like farm and ranch. Bob: Yeah. And you could carve off just a tiny bit of that, too. You don’t have to carve off the a hundred acres you might own, maybe just a half acre or an acre. Shawn: Well Bob, don’t you do Number three? Bob: Number three is highly appreciated stocks or bonds. And we’ve been in a pretty strong bull market the last couple of years, especially with all the stimulus package that has been given to us by our politicians. You could just carve off one share, 5 shares, 15, 20, and we will help a church. We’ll open a brokerage account up for them and put that in there and sell it and we won’t charge them anything. No commission, no fees. Shawn: Well, because for a church and we want to do things to try to help them out. And if you’re trying to give those stocks or bonds, whatever it might be, well hey, well let’s hope you do that and benefit that church. Bob: And you want to carve that off. You don’t want to sell it and then give it away. Shawn: Right. Exactly. Bob: Because then you’ll have to pay the tax on it, but you’ll get the full tax advantage by… Shawn: Basically transfering. You’re just transferring it. Bob: That’s right. Transferring that stock. Shawn: That’s right. And number four, give miscellaneous valuables and collectibles. Bob: Most people don’t think about the things like this. Shawn: So maybe you have some art or antiques just sitting around collecting dust that you’re not really getting any joy from. It was, I think it was Marie Kondo or something that if this thing doesn’t give you joy anymore, just say thank you and let it go. Bob: I like that. Shawn: So another one might be a classic automobile or maybe you have one you just really don’t need anymore. It’s kind of been sitting around and the final one is maybe a boat you have that you don’t need and has been sitting in a storage unit collecting fees for years on end. And there’s ways to do this, right? So of course at any time, feel free to pause this, text us, call us, whatever you want. Bob: You always hear that advertisement. I’ll be going home and I’ve got satellite radio and it says Kars for kids. KARS, Kars for kids. They sing that little tune to it. It’s kind of catchy. Shawn: There’s some really cool organizations and nonprofits that effectively help with these types of things – the art, collectibles, boat, cars. And that way you make sure that you get the tax benefit and they kind of handle the getting it to whoever needs to get it or getting it sold to generate that cash. Bob: They’ll help you. The charities will help you do this. Yep, exactly. Shawn: Alright, number five, Bob. Bob: Well, number five is a big one here in Texas where we’re located is mineral rights, especially down in south Texas. There’s a lot of oil and natural gas that people have mineral rights, and even water mineral rights or water rights are very valuable and you can carve off a portion of that also to help others and also create that tax deduction that you may need now. Shawn: Exactly. And number six, giving out of your estate. Bob: Most people don’t think about this for some reason, but maybe this comes later, but it could also come now. The average inheritance is spent in two to three years on things that will rust and rot that might’ve taken you 30 plus years to accumulate. Shawn: That’s right. And those numbers on spent within two to three years, that’s not based on, oh, well for less than $500,000 or between this amount and this. No, just in general, it doesn’t matter if you passed on multiple millions of dollars to your beneficiaries or $50,000, two to three years is about the average, which is sad. Bob: Some ideas here with your estate is make a charity, or charities, a beneficiary, a partial beneficiary of that estate, maybe 10 or 15, 20, 30%. Some people that are single and have no children, I’d make 100%. Shawn: Yeah, why not. Bob: Of your estate that’s going to go at your death. You can also give a percentage of your estate right now to charities and get to watch the benefit of that right now. Shawn: Bob, just for an example for our viewers and listeners, but I believe for you and Rachael’s estate it’s what? 20%? Bob: That’s right. It’s 20%. Shawn: Because you’ve got the three girls and then it’s the 20% off the top, if you will. And then what’s remaining is evenly. Bob: We’re using the donor advised fund for that. So we call it the Barber family giving fund. Another thing in your estate, a lot of you have is IRAs and that is IRA money when it’s inherited, you have to pay tax on all of it. But if that goes to a charity, they don’t have to pay tax on any of that. If you’re going to give away anything out of your state and you look at it, maybe the IRAs are a really good choice for giving to an estate. Shawn: Alright. And then number seven, make those RMDs, the required minimum distributions, a QCD, which is a qualified charitable distribution. If you’re in your seventies, it is the law that you take those certain required minimum distributions. It is age adjusted every year. There’s whole bunch of fun factor stuff. It’s not as easy as a certain percentage. But anyway, whatever that RMD happens to be each year, instead of giving cash to your favorite charities, like your local church, give them a qualified charitable distribution because it’s a lot more tax efficient because otherwise if you take the money out as a required minimum distribution, you have to pay income tax on it. And then you give money to the church, well you do that qualified charitable distribution. For example, maybe yours was $5,000. Well, depending on your tax bracket, you might have what, $4,000 or $3,500 left over. But if you do a qualified charitable distribution, the QCD, the full $5,000 goes to the charity. Bob: This is Christian Financial Perspectives. And I tell a lot of our clients, because they’re tithers and they give to their church, instead of giving cash, give from your IRA if you’re in your seventies in the required minimum distribution stage. Now, you can’t do this out of an IRA unless you’re into that, into the RMD requirement. Shawn: For me personally, that’s kind of a bummer that you have to be in your seventies to even take advantage of that. Hey, once I’m in my sixties, if we don’t need all of it, I’d rather donate that way. But anyway. Alright, well number eight. Bob: Number eight is giving a business interest. That would be like I own a business and that would be carving out some of your business. And for many business owners, plumbers or electricians, heat and air people, that’s their biggest asset is their business. And they want give, but they don’t have the resources possibly. Well, they could make God a part owner in their business or just a minute owner, a charity. And they can donate non-voting interest in their business to a charity and they’re going to get a substantial tax deduction for doing that. But it still allows you to manage the business and to maintain the management oversight of the company. And you have the majority of voting interest in that. Shawn: Yeah. It’s similar to publicly traded companies where there’s different classes of stocks and so you have your normal voting, common stock, but then you might have a preferred stock that doesn’t have the right to vote, but maybe receives dividends. So you could do something similar to that for even your own private business. And one of the benefits to that as well is not only the tax deduction now, but you also have the benefit of still being able to pass on that business. Maybe you have one of your kids or in-laws that ends up working with you and they want to take over the business as you start to retire. Well, they can still do that even though you gave away some of the interest to a charity. Bob: Okay, number nine, I thought of your dad. Okay. Because you tell everybody what your dad does. Shawn: He’s a farmer. So giving agriculture, livestock, crops, cow, goat, horse to charity, whatever it might be. Bob: But I was thinking about some of the crops and that actually goes back to scriptural, the first fruit of your crops as well. There’s just all kinds of neat things you can do if you’re a farmer or rancher or you own any agriculture. Shawn: That’s right. Okay. Bob: We’re down our last one or 10th one. Shawn: I’ll let you do number 10, Bob. Bob: Alright, well if you don’t have any of the above, you don’t have the land, you don’t have the gold, you don’t have the IRAs, you don’t have any of the above. How about this one? Give up your time. Shawn: That’s right. Give of your time because we all have time regardless of how much money we do or don’t have. Bob: Some people think you may not have the time, but think about how much time you spend on your smartphone per day. You have the time. Go on a mission trip, a medical one or educational one, maybe even one that’s about construction, volunteer construction, Habitat for Humanity is in most communities. Shawn: And they’re real good at, even if you’re not that great at doing stuff, they’ll help. Yeah, exactly. They’ll find something for you to do to help. Bob: Exactly. Volunteer time at a local food shelter, your church, or any local charity. So that’s one thing that all of us can do. You may not receive the tax deduction from that, but you’ll get the benefit. Shawn: I think a great example, especially your local church is that I know our church, we’re constantly trying to get more volunteers and when your church is 500 to 600 people and it seems like the same 20-30 people are doing setup and tear down, they’re helping with the kids every week and all that stuff. It’s like, come on guys. I know there’s a whole bunch more of you that could volunteer. Maybe every other month you help on a Sunday. If every single member did that kind of a thing, there would never be an issue of lack of volunteers. It’s extremely helpful. You’re blessing other people in your church or if you’re working with the kids, you’re blessing those kids and you’re doing it for the Lord. Bob: There you have it. There’s 10 ideas. I hope that you can grab out one or two of these, maybe even two, three or four of them. Shawn: Feel free to do all 10 if you want. Bob: Because it is such a blessing to be giving and blessing others and yourself. And of course it can lower your tax burden because remember what we said in the beginning, Acts 20:35, “It’s more blessed to give than receive,” and I really believe that. Shawn: Amen. Okay, thanks again as always for joining us and God bless. [DISCLOSURES] * Investment advisory services offered through Christian Investment Advisors Inc dba Christian Financial Advisors®, a registered investment advisor registered with the SEC. Registration as an investment advisor does not imply a certain level of skill or training. Comments from today’s show are for informational purposes only and not to be considered investment advice or recommendations to buy or sell any company that may have been mentioned or discussed. The opinions expressed are solely those of the hosts, Bob Barber and Shawn Peters, and their guests. Bob and Shawn do not provide tax advice and encourage you to seek guidance from a tax professional. While Christian Financial Advisors® believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability.