The Most Enduring Assets Are Trees!

Forest, Funding

Our Forest Fund, together with Forterra, is ramping up for the final phase of timber rights purchases at Port Gamble Forest Heritage Park. The target close date is year end! That’s coming up fast. Our Forest Fund needs your help now to raise another $975,000 in new donations. That will bring the total pot to $2 million and will purchase a good portion of, but not all, the remaining timber rights.

Of course, more than that will save even more trees. And the sooner the better as it will strengthen Kitsap County and Forterra’s bargaining position with the timber company as negotiations progress. This is the last opportunity to buy the timber rights on any remaining forested acreage left in the park.

Give Assets and Skip the Capital Gains Tax

I’ve been squirreling away assets for my old age, too! But I need help to keep my house from being cut down…

And as for donations, our partner Kitsap Community Foundation, reminds us that people can donate assets, such as stocks, mutual funds and even land, instead of cash. There are financial advantages to donating an asset, like a stock or mutual fund, from either a taxable brokerage account or a tax deferred traditional IRA account (not a Roth).

Are you are one of the fortunate investors whose portfolio has grown along with the excitement about AI? Consider donating a bit of that to save trees and thus offset some of the carbon emissions of the data centers powering AI.

If you do decide to donate assets, it is super important to notify Kitsap Community Foundation so that when the assets arrive, they’re quickly applied to the Our Forest Fund account. Click here to see the one-page document with what information KCF needs. It would be a shame to have $1 million come in but not know it’s for the trees and miss our chance to keep more forest in Port Gamble Forest Heritage Park!

Our Forest Fund is not in the tax advice business, so be sure to check about donating an asset with a tax professional. Nevertheless, the basics are this:

Stocks, securities, & mutual funds

  • Giving appreciated assets like these help you avoid paying capital gains taxes and can give you an income tax deduction for the full value of the gift, if you’ve had the assets for more than one year. (Be sure to consult with a tax professional.)
  • Gifts of assets can often save you far more on taxes than gifts of cash
  • Avoids all capital gains taxes
  • Receive an income tax deduction for the value of the assets (if you’ve had them for more than a year)

Qualified Charitable Distributions from your traditional IRA

A Qualified Charitable Distribution (QCD) is a tax-efficient way for individuals who are age 70½ or older to make gifts directly from their traditional Individual Retirement Account (IRA). QCDs can count towards satisfying an individual’s Required Minimum Distribution (RMD) for the year, which is the minimum amount that an individual must withdraw from their IRA each year once they reach age 73.

two people walking in foggy forestWho it’s for:

• Individuals 70½ or older
• Those who have a traditional IRA — not a Roth IRA
• Those who want to make a charitable gift that counts towards their Required Minimum Distribution
• Those who want to reduce their taxable income

If you wish to make a Qualified Charitable Distribution, contact your IRA custodian to get started. You can instruct him/her to distribute up to $111,000 directly to one or more eligible charities.

Remember, a QCD counts towards your Required Minimum Distribution. The QCD is not included in your taxable income, which can reduce your overall tax liability. You do not receive a charitable income tax deduction.

It is a little confusing, which is why you should talk to your financial advisor and also to Tina O’Brien at Kitsap Community Foundation (tina@kitsapfoundation.org), to decide if this is a good strategy for you.