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40% off! — gifts made during lifetime v. gifts made at death

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40% off! If this sign were up at your favorite store, it would definitely get your attention.

Charitable gifts made during lifetime are generally preferable to charitable gifts made by will, for fairly simple tax reasons.

A charitable bequest is deductible for federal estate tax purposes, but is not deductible for income tax purposes.

A gift made during lifetime is out of the donor’s estate for estate tax purposes, but also provides the donor with a deduction for income tax purposes.

Thus, for donors in 40% combined federal-state income bracket, a charitable gift during lifetime is 40% less expensive than a similar gift during will.

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