Principal of McManus & Associates and estate planning Attorney John McManus recently worked with Bloomberg’s Margaret Collins to help identify tax and estate planning strategies employed by Republican presidential candidate Mitt Romney, who last week publicly released his tax return. Examination by McManus and his team revealed that Romney utilized smart tactics to maximize his charitable deductions and save on taxes. McManus draws from his expert knowledge to help explain one smart move identified in the public documents.
From the article:
Giving appreciated stock directly is better than writing a check because individuals generally receive a larger charitable deduction and make the donation with pretax dollars, said John O. McManus, principal of the law firm McManus & Associates in New Providence, New Jersey, and Manhattan, whose clients include those in the hedge-fund and private-equity industries.
If someone bought a share of stock for $1 and it’s now valued at $100, they would have a $99 gain when selling, McManus said. That means they may pay about $20 in state and federal capital-gains levies and if they donated the after-tax proceeds, that leaves them with an $80 charitable deduction. If they gave the share worth $100 directly, it may generate a $100 deduction and the foundation or donor-advised fund could liquidate the position without paying tax, thus keeping more assets to spend on its charitable endeavors, he said.
To read on for more of Romney’s strategies that can be replicated, click here.
⟩
⟩
⟩
⟩
⟩
⟩