This blog focuses on estate planning, but many times estate planning intersects with income tax planning. Take, for example this week’s post on The Wall Street Journal Online edition titled “There Is Still Time to Cut Your 2011 Income Taxes” found by clicking here.
There are many good suggestions. In particular, I like the idea of making charitable stock donations. It is true that if you donate appreciated stock instead of cash, you don’t owe any tax on the capital gains, and you can deduct its full value. As an added bonus, charitable gifts are tax free and do not count against the annual gift exclusion nor do they count against the lifetime gift exemption. Plus, once the gift is made, the stock is no longer included in the value of your estate for estate tax purposes. Consider the gift a trifecta of sorts. That is, you are doing something that benefits the community, reducing your income tax, and reducing potential estate tax liability all at the same time.