Charitable Strategies Before the Calendar Closes

Bigger gifts, appreciated assets, and the new OBBBA math on what a deduction is worth

A Tax Alpha Companies playbook for CPAs

Why charitable planning is a fourth-quarter conversation

Charitable giving is the rare strategy that clients want to do and still routinely botch — not because the intent is missing, but because the execution and timing are wrong. A gift made carelessly on December 30 can be worth a fraction of the same gift structured in October. And beginning in 2026, the OBBBA has changed the arithmetic in ways that reward planning and penalize waiting.

This is fourth-quarter work because the deadline is absolute: a gift counts for the current year only if it is completed by December 31. For the client having an unusually high-income year — a business sale, a large bonus, a Roth conversion — the value of a deduction is highest right now, in the year the income lands. The job is to pair the gift with the income and to structure it for maximum efficiency.

The base moves, done right

Three techniques do most of the work. None is exotic; all are underused.

1. Give appreciated assets, not cash

This is the single most efficient charitable move and the most frequently missed. A client who donates long-term appreciated securities (held more than a year) directly to a public charity gets two benefits at once:

• a fair-market-value deduction for the full current value of the securities, and
• complete avoidance of the capital-gains tax on the appreciation.

Compare that to selling the stock, paying the gains tax, and donating the after-tax cash — the client gives less and deducts less. Donating the appreciated position in kind is strictly better whenever the asset has a meaningful embedded gain. The same logic extends to appreciated real estate and other long-term capital-gain property, subject to tighter deduction limits (below).

2. Bunch through a donor-advised fund

Since the standard deduction is large, many clients get no tax benefit from ordinary annual giving — their itemized deductions never clear the standard-deduction threshold. Bunching solves this: the client front-loads several years of intended giving into a single year, itemizes big that year, and takes the standard deduction in the off years.

A donor-advised fund (DAF) makes bunching practical. The client contributes a lump sum (ideally appreciated securities) to the DAF now, takes the full deduction this year, and then recommends grants to operating charities over the following years on their own schedule. The charities still receive steady support; the client captures the deduction in the high-value year.

3. Charitable remainder trusts for the big, appreciated, illiquid asset

For a client sitting on a large, highly appreciated, or illiquid asset — a concentrated stock position, a piece of real estate, a business interest — a charitable remainder trust (CRT) can do what an outright gift cannot. The client contributes the asset to the trust, which can then sell it without an immediate capital-gains tax, reinvest the full proceeds, and pay the client (or another beneficiary) an income stream for life or a term of years. The client takes a partial charitable deduction now for the present value of the remainder, and whatever is left at the end goes to charity.

A CRT spreads the gain, produces income, and delivers a current deduction — the right tool when an outright gift is too much and a straight sale is too costly.

The new OBBBA math — and why it cuts against waiting

Beginning in 2026, the One Big Beautiful Bill Act changes what a charitable deduction is worth, in two ways that every giving client should understand:

• A 0.5%-of-AGI floor for itemizers. Charitable deductions for itemizers are now reduced by 0.5% of AGI — the first half a percent of AGI in gifts is simply not deductible. On $2,000,000 of AGI, that's the first $10,000 of giving lost. The floor makes bunching more valuable, not less: concentrating gifts into one large year means the floor bites once, against one year's AGI, rather than nibbling at every year's smaller gifts.
• A 35% benefit cap for top-bracket clients. The value of itemized deductions, including charitable, is capped at 35 cents on the dollar for taxpayers in the top (37%) bracket — so the highest earners no longer deduct charitable gifts at their full marginal rate. A gift that would have saved 37 cents on the dollar now saves at most 35.

There is also a new above-the-line deduction for non-itemizers — up to $1,000 (single) / $2,000 (married filing jointly) — a modest benefit for the client who takes the standard deduction.

The planning point: for a top-bracket client contemplating a very large gift, it is worth modeling whether accelerating or bunching the gift, and whether giving appreciated assets versus cash, produces a materially better result under these rules. The changes reward deliberate timing.

Completed, not pledged — the December 31 mechanics

A deduction lands in the current year only if the gift is complete by December 31. This is where good intentions die on the calendar:

• Cash must be delivered — a check mailed (and postmarked) by year-end, or an electronic transfer settled.
• Securities must be transferred out of the client's account to the charity's account by year-end. These transfers can take several business days to settle, so a gift initiated on December 30 may not complete in time. Start appreciated-security gifts well before the 31st.
• A CRT or DAF must be established and funded by year-end to count.
• A pledge is not a gift. Promising to give does nothing until the gift is actually made.

And the deduction ceilings still apply: generally 60% of AGI for cash gifts to public charities, 30% of AGI for long-term appreciated property, with a five-year carryforward for any excess. A very large gift may deduct over several years even when it is completed in one.

Who this fits

A strong candidate:

• A client already giving, or giving in an unusually high-income year
• Holding appreciated securities, real estate, or a concentrated position
• Whose annual giving doesn't clear the standard deduction (a bunching candidate)
• Facing a large liquidity event where a CRT could spread the gain

Where it needs care:

• Top-bracket clients, who should model the new 35% cap and 0.5% floor before a large gift
• Illiquid or hard-to-value assets, which require a qualified appraisal
• CRTs, which are irrevocable and carry setup and administration cost — not for small gifts
• Year-end timing, where settlement delays can push a gift into the wrong year

The practitioner's checklist

1. Pair the gift with the client's highest-income year for maximum deduction value.
2. Default to giving long-term appreciated assets over cash wherever there's an embedded gain.
3. For clients who don't clear the standard deduction, evaluate bunching through a DAF.
4. For a large, appreciated, illiquid asset, evaluate a charitable remainder trust.
5. Model the OBBBA 0.5% floor and 35% cap for top-bracket clients before a large gift.
6. Confirm the gift will be completed by December 31 — start security transfers early.
7. Confirm AGI ceilings (60% cash / 30% appreciated) and plan the five-year carryforward for any excess.
8. Obtain a qualified appraisal for gifts of non-publicly-traded property.

Talk it through

Charitable planning is where the difference between a good intention and a well-structured, well-timed gift shows up directly on the return — and the OBBBA has raised the stakes on getting it right. If you have a client planning a meaningful gift this year, it's worth structuring before the calendar closes.

Ross Brannon · Tax Alpha Companies
C: 850-566-7999 · ross@taxalphacompanies.com
Schedule time with Ross

Dollar thresholds and the OBBBA provisions described here reflect law as enacted and take effect beginning in 2026; verify current figures before relying on them. This material is provided for educational and informational purposes only and does not constitute legal, tax, accounting, or investment advice. The strategies discussed are general in nature and may not apply to specific individual circumstances. Any examples are hypothetical illustrations and are not a guarantee of any particular result. Tax laws are complex and subject to change; readers should consult qualified tax and legal professionals before acting on any strategy discussed.