Chapter 19
Charity

You will give money away. The only questions are how much, to whom, and whether you hand a slice of it to the Treasury on the way out — because the difference between a well-structured gift and a careless one, at the scale this book is written for, is routinely a third of the amount given.

That is the entire argument for reading a tax chapter about generosity. Nothing here will tell you what to care about. It will tell you that selling stock and donating the cash costs you the capital gains tax for no reason, that a gift to a person is worth nothing on Schedule A however deserving they are, that from 2026 the first half a percent of your AGI in gifts is simply not deductible, and that the promoter offering you a four-to-one write-off on a painting is selling you an audit. Get the mechanics right and the same sacrifice buys more.

Two framing facts before the detail. First, deductibility depends on who receives the gift and what you give — two independent axes that this chapter keeps separate because conflating them is where most errors start. A 501(c)(3) public charity is the assumed recipient throughout; 501(c)(4) advocacy groups, political committees, and individuals are not deductible at all, whatever the cause. Run any organization that matters through the Tax Exempt Organization Search before you give — exemptions do get revoked.

Second, the deduction is worth your marginal rate, never a hundred cents on the dollar. Giving is a transfer of wealth out of your balance sheet, and no amount of structuring makes it free. What structuring does is stop you from paying twice — once to the charity and once to the IRS on a gain you never had to realize.