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I WISHED I HAD MY friend Chuck’s memory. He can remember things from our college days as if they happened yesterday. My memory isn’t nearly as good. There are, however, a few moments I’ll never forget.
I remember in high school when a classmate asked a girl, who was also in our class, if he could have her leftover orange peels. I knew Floyd well enough to know he went to school hungry some days. I offered Floyd my lunch. I thought he needed it more than I did. I also wasn’t crazy about the tuna fish sandwich my mother had made me.
I was lucky when I was growing up. My parents provided me with life’s necessities. We weren’t rich. My father was a machinist and my mother was a switchboard operator at a department store. But they made enough to provide for my sister and me.
The money I made working summer jobs put money in my pocket. I didn’t have to contribute to the household income. As a result, I was able to buy myself lunch the day I gave Floyd my tuna fish sandwich.
I remember when I was in the fifth grade and Hershel came to school with red lipstick on the side of his face. I guess his mother kissed him goodbye that morning. Hershel didn’t have a father.
The kids teased him. Not me. I talked to him as if nothing happened. Hershel was a tough kid, but that lipstick episode revealed he was actually a nice guy under his rough exterior. We became good friends until he moved away the following school year.
One day, I was going into a store and a young girl was outside selling candy bars to raise money for her school. She was by herself. There was no parent by her side. There wasn’t much foot traffic, so there weren’t many opportunities for sales. I felt she could use some help. I bought quite a few candy bars. I told her to keep them and sell them to someone else.
I don’t know why I still remember these various small moments. They say people enjoy spending money on others more than on themselves. Maybe being kind and helpful to others in some small way can also provide memorable moments you cherish for life.
That’s why it might be best, if you can afford it, to start giving money away while you’re alive. That way, you can get the enjoyment of watching your money help loved ones or dear friends in need. One of the best ways to give away money to individuals is by taking advantage of the gift-tax exclusion. You can give up to $16,000 in 2022 to as many individuals as you wish without paying the gift tax.
Dennis, this piece is very touching, very challenging. I would like to truthfully say that I had your generous spirit over the whole of my life.
You are a kind soul. Bless your heart.
When you reach age 70 1/2 many people find making charitable contributions to a recognized charity directly from a traditional IRA to the charity via a qualified charitable distribution to be the most tax efficient.
Before 70 1/2 some people who itemize utilize donor advised funds (DAF) by gifting appreciated stock. Donor-advised funds, which are 501(c)(3) public charities, provide an excellent gifting option for donations of publicly traded securities, as the funds typically have the resources and expertise for receiving, processing, and liquidating the assets. One of the great side benefits of DAF’s is the ultimate gift to a qualified charity from the DAF is the distribution can be done anonymously and reduce endless charity requests.
Thanks Dennis for your post. Ultimately the intent of charitable gifts has nothing to do with taxes and everything with caring as your post well illustrates.
Best, Bill
Those are lovely memories, Dennis, and your gifts have been of the finest kind. Thank you for writing of them.
My charitable donations are above the norm — requiring planning and some dollar stretching — but rarely if ever do they produce similar satisfaction. All too often they result in yet more requests for ever larger amounts. Nonetheless, I feel a responsibility to support causes I am fortunate enough to be able to help. To give seeking reward or recognition is not, in my mind, true giving.
Nice article Dennis, and the info in the gift-tax exclusion link is excellent.
Gift tax? Yeeesh. It is a common misconception that if you gift more than $16k you would owe a Gift Tax. That is not true, unless you’re giving away millions. Yes, you have to file a Gift Tax Return. But the result will not be any additional tax owed. The amount will be deducted from your lifetime exclusion that will come into play when your estate is settled. But again, it will only matter if your estate is in the millions.
This is such a common misconception and the last sentence in this article just goes to propagate it. I’m not longer surprised when I see this, but I expect better from the authors in Humble Dollar.
Not everything can be explained in full in every article. I assume you clicked on the hyperlinked word “exclusion” above, where all the details are indeed found:
https://humbledollar.com/money-guide/gift-tax-exclusion/