Of Bears and Bulls and Charitable Opportunity

If you are now at least 70 ½ years old and your retirement plan includes IRA investments in the stock market, this might be an auspicious year to make a charitable donation.

Late in 1999, after a rather steady climb for two decades, the Dow Jones Industrial Average reached 11000, and rather complacent long-term investors were sorta expecting this trend to continue. But after fluttering around for another decade, it bottomed out at 7000, and only reached 11000 again in late 2009. Many good quality stocks paralleled the Dow Jones, and there was a whole decade of no net gain for many long-term investors, while those less patient often sold at a loss.

But since then, the market has rebounded nicely and as an indicator, the Dow Jones hovered around 18000 in 2014, reached 20000 in August 2017, and broke 23000 in October 2017.

So as I write this in early November, your stocks might be worth a lot more than they were only a few years ago, and your Minimum Required Distribution (MRD) for 2017 is likely going to increase substantially based on the December 31 values. And so might the taxes you will owe on this withdrawal, especially if it kicks you up into a higher tax bracket.

But a charitable donation before December 31 can be used to satisfy part or all of your MRD this year if rolled over directly to the recipient. Then this value can be deducted from your gross income for federal tax purposes, which can bring your taxable income back down.
What might make this year particularly auspicious for doing this is that historically the bear and the bull have taken turns dominating the market. So it would probably be wishful thinking to expect the present escalating trend to continue into future years. Also, the present chaos in Washington could eliminate the charitable option for next year.

Recipients of a rollover gift of course need to be documented as genuine charitable nonprofits. Bur Oak Land Trust is, as a 501(c)3, and you would get to see your gift in action right here.

Planting a power pole to support an osprey platform at Belgum Grove.

If you suspect that a charitable IRA rollover might fit your retirement situation this year, check with your financial advisor for details. Perhaps she or he can select a level of donation that would just keep you out of that higher tax bracket, so that a big chunk of what you would have paid in taxes anyway can instead go to your favorite action nonprofit.

And if your advisor says it looks good, call Tammy Wright, Bur Oak Land Trust’s executive director (319-338-7030), about what you might like to see happen around here. Seminars? More tree plantings? An annual bus tour? Wider outreach? Wildlife corridor purchases? Reestablish woodland wildflowers? More property maintenance? A snake hibernacula? A rare butterfly plantation? A bridge at Turkey Creek? An elevated bird-watching platform in the canopy? A frog and turtle pond? Osprey nesting platforms were on my personal wish list last year, so I was happy to learn that an Eagle Scout planted one at Belgum Grove recently and another one is scheduled to be installed in an as-yet-undetermined location in 2018.