E.43 Charitable/philanthropic contributions and deductions

Question 1

A donation or gift made to a qualified nonprofit organization, which may be tax-deductible if certain conditions are met.

Answer 1

Charitable Contribution

Question 2

A nonprofit organization that meets IRS requirements for tax-deductible donations, typically classified as a 501(c)(3) entity.

Answer 2

Qualified Charitable Organization

Question 3

A deduction claimed on Schedule A of a tax return that allows taxpayers to deduct eligible expenses, including charitable contributions, rather than taking the standard deduction.

Answer 3

Itemized Deduction

Question 4

A charitable giving vehicle that allows donors to make tax-deductible contributions, receive an immediate tax benefit, and recommend grants to charities over time.

Answer 4

Donor-Advised Fund

Question 5

A direct transfer of funds from an IRA to a qualified charity, which counts toward the required minimum distribution (RMD) and is excluded from taxable income.

Answer 5

Qualified Charitable Distribution

Question 6

A donation of stocks, bonds, or mutual funds that have increased in value, allowing the donor to avoid capital gains tax while claiming a charitable deduction.

Answer 6

Gift of Appreciated Securities

Question 7

A trust that provides** income to a beneficiary for a set period**, with the remaining assets donated to a charity at the end of the term, offering tax benefits.

Answer 7

Charitable Remainder Trust

Question 8

A trust that provides income to a charity for a specified period, after which the remaining assets are transferred to beneficiaries, potentially reducing estate taxes.

Answer 8

Charitable Lead Trust

Question 9

A nonprofit organization, typically funded by an individual or family, that makes charitable grants and must meet annual distribution requirements set by the IRS.

Answer 9

Private Foundation

Question 10

A tax strategy in which donors make multiple years’ worth of charitable donations in a single tax year to exceed the standard deduction and maximize tax benefits.

Answer 10

Bunching Charitable Contributions