As attorneys, CPAs, and financial advisors prepare clients for year-end planning and the years ahead, a few charitable giving opportunities deserve renewed attention. While familiar strategies such as gifts of appreciated stock, Qualified Charitable Distributions, and donor-advised funds remain important, several recent tax developments may create planning opportunities for certain clients.
Opportunity Zone Investors Face a Key Tax Event
Clients who invested gains in Qualified Opportunity Funds under the original Opportunity Zone rules are approaching an important milestone. Deferred gains generally must be recognized by December 31, 2026, even if the investment is held longer. For clients expecting significant taxable income from that gain recognition, charitable giving may help offset a portion of the resulting tax liability.
Depending on the client's circumstances, strategies could include increasing charitable contributions, bunching multiple years of giving into one tax year, or contributing long-term appreciated securities to a donor-advised fund.
Don't Overlook New Benefits for Non-Itemizers
Many advisors are focused on new charitable deduction rules affecting itemizing taxpayers beginning in 2026. However, another notable change applies to clients who take the standard deduction. Starting in 2026, non-itemizers may deduct up to $1,000 in qualifying cash charitable gifts ($2,000 for married couples filing jointly).
While donor-advised fund contributions and noncash gifts do not qualify, this change creates a potential tax benefit for many clients who previously received no federal income tax deduction for their annual charitable giving.
Estate Planning Conversations Still Matter
The increase in the federal estate and gift tax exemption to $15 million per individual in 2026 means fewer clients will face federal estate tax exposure. However, charitable planning remains an important component of many estate plans. Beneficiary designations, retirement assets, family goals, concentrated holdings, and philanthropic priorities should continue to be part of estate planning discussions.
For charitably inclined clients, bequests to the Community Foundation for Northern Virginia or other qualified charities may still provide estate tax benefits while creating a lasting philanthropic legacy.
As always, the Community Foundation for Northern Virginia welcomes the opportunity to partner with you and your clients to explore charitable strategies that help achieve both financial and philanthropic goals.
The Community Foundation team is happy to help you structure charitable giving tools and plans to achieve your clients’ philanthropic goals—whether through beneficiary designations or any other type of charitable giving vehicle. This email address is being protected from spambots. You need JavaScript enabled to view it.!
The information contained in this article is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.
Questions?
