Three clients. Three solutions. One common theme.

by Nicolette Rea, JD, Associate Counsel, Philanthropic Giving  

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As the calendar year draws to a close, you’re likely well aware that charitable giving is not only important to your clients, first and foremost as an act of generosity, but also as a powerful tool in tax planning.  

Consider the following hypothetical client situations:  

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Helping Emily Harper Benefit from Itemizing Deductions

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Your client, Dr. Emily Harper, a 62-year-old physician, has long supported many local charities with annual donations totaling around $20,000. While generous, her giving has not exceeded the standard deduction under the current tax law, which means she has received little to no tax benefit for her contributions. You counsel Emily that 2026 will bring even more limitations on her ability to deduct charitable contributions.  

Working with the Community Foundation, you arrange for Emily to contribute $100,000 of appreciated stock this December to establish a donor-advised fund. This large, single-year contribution will allow her to itemize deductions for 2025 and maximize her tax savings, while still preserving the flexibility to recommend grants of $20,000 per year to her favorite charities over the next five years. By front-loading her philanthropy, Emily not only secures a significant deduction even under the higher standard deduction thresholds in place, but she also avoids potential exposure to the upcoming IRS “floor and cap” rules under the One Big Beautiful Bill Act.  

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Diversifying Jonathan Lee’s Concentrated Stock Holdings

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Jonathan Lee, a 58-year-old business executive, has accumulated a significant position in a favorite stock over the past two decades. As Jonathan’s advisor, you are concerned about the concentration risk in his portfolio and the steep capital gains tax bill he would face if he sold shares outright.

Working with the Community Foundation, you arrange for Jonathan to donate $250,000 worth of his highly-appreciated stock to establish a donor-advised fund. This move accomplishes two critical objectives: it allows Jonathan to bypass the capital gains tax on the gifted shares and makes him eligible for a full fair-market-value charitable deduction for the stock’s value on the date of the gift. Now, instead of writing annual checks from after-tax dollars, Jonathan can recommend grants from his donor-advised fund over time, maintaining his giving pattern while enjoying significant tax efficiency. What’s more, by contributing stock instead of cash, Jonathan transforms a concentrated holding into diversified charitable capital.  

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Using Qualified Charitable Distributions for Long-Term Giving

Your client, Margaret Davis, is 74 years old. She continues to receive royalty income from several books she wrote throughout her career as a successful novelist. Margaret also owns several IRAs. Her royalties comfortably cover her living expenses, leaving her without a need for the Required Minimum Distributions from her IRAs.  

You are counseling her, though, that she has to take those distributions under IRS rules.  

Recently, Margaret sent you an article she read in the Wall Street Journal about Qualified Charitable Distributions, or QCDs. Because Margaret is over the age of 70 ½, she can direct up to $108,000 (the 2025 limit) to qualified charities. You reach out to the Community Foundation for help, and you are glad you did because the Community Foundation team is setting up a designated fund to receive Margaret’s QCDs. The designated fund, in turn, will support the local animal shelter, where Margaret has volunteered for decades, and will continue to provide support even after Margaret's lifetime. What’s more, the QCD dollars are excluded from Margaret’s income and still satisfy a portion of her RMD. The QCD also reduces Margaret’s exposure to Medicare IRMAA surcharges—benefits that would not accrue if she simply donated from her after-tax cash.  

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Partnering to Strengthen Community Giving

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For advisors working with clients like Emily, Jonathan, and Margaret, the Community Foundation Tampa Bay team provides expertise in charitable strategy, fund administration, and local impact.

The tax benefits of charitable giving are valuable, but the greater reward lies in helping clients achieve their philanthropic goals and make a lasting difference in our community.

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To learn more about how the Community Foundation can support your clients’ charitable giving strategies, please contact Nicolette Rea, JD, Associate Counsel, Philanthropic Giving, at nrea@cftampabay.org or (813) 609-4855.

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