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The ABCs of QCDs

Faith And Finance / Rob West
The Truth Network Radio
June 7, 2024 1:00 am

The ABCs of QCDs

Faith And Finance / Rob West

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June 7, 2024 1:00 am

The Qualified Charitable Distribution or QCD is one of the most underutilized tax benefits, yet almost 25 million Americans are eligible to take it. But because of their various requirements, more folks might take advantage of this option if they understood them better. On today's Faith & Finance Live, host Rob West will welcome David Hogan to talk about the ABCs of QCDs. Then Rob will take some calls and answer various financial questions. 

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The following episode of Faith in Finance Live is prerecorded, so please don't call in. Well, it's my pleasure to have my friend David Hogan on the program today. David is a CPA and principal with Clifton Larson Allen CPAs in Atlanta. David, great to have you back with us. Thanks for having me, Rob. It's always fun to be able to help people be strategic in their giving.

Well, I love that idea as well. We're saying that a lot of folks who might benefit by taking a qualified charitable distribution aren't doing it. So why don't you help them understand what a QCD is? So in simplest terms, a qualified distribution to charity is a direct transfer from your individual retirement account to a qualified charity. You don't get a deduction for that, but you also don't have to report the income. So it creates a great benefit for people that qualify.

Yeah, it really does. So how exactly do you take a QCD? Do you have to do it over the internet? Can you do it over the phone?

What are the mechanics? So it depends on who you have your funds with, but the easiest way if your IRA has checks is to write a check to your favorite charity. So a lot of IRAs allow that and maybe they allow it and people don't have a checkbook, so it might be a good idea to request one. But if you don't have a check, you can probably do it a direct transfer directly on the internet or call your advisor. If you can't figure out how to do it, if you call your favorite charity, they probably can help you do it. Excellent. And you mentioned that there are tax advantages.

Let's go back over that. What exactly are the tax advantages of a qualified charitable distribution? Well, for people that are over 70 and a half, that may not have mortgage interest, so they may not be itemizing, so that when they do their charitable contributions, they really aren't getting any tax benefit. By doing it from your IRA, you don't get the deduction, but you don't have to report that income. So you essentially are getting to deduct it by not reporting that income from your IRA distribution.

Yeah, so the money is coming out of the IRA, you're not recognizing it as income, and that really is, David, if I'm correct, the only way to get money out of an IRA without paying tax on it, right? That is correct. That is correct.

Okay. And it has to go directly to the charity. You can't take it out and then write a check to the charity, it has to go directly to the charity. Yeah, that makes sense. And that leads us to the next piece, and that is a required minimum distribution.

So how do these relate? So they moved the retired distribution to 73, so you don't have to do it at 70 and a half, but you still can benefit. But this distribution to your charity does satisfy your required minimum distribution. So particularly if you've got a large IRA bigger than you need, you can direct it to a charity and not pay tax on it. Yeah. So essentially someone who is taking the required minimum because the IRS says they have to, but they don't need the money.

Their bills are covered from other income sources. This is a way to get this money out without paying tax on it and satisfy the required minimum. Exactly. Yeah. Now for folks who want to give the same amount they were going to give, I guess one strategy is they could replace the giving they were going to do with after tax dollars from checking or savings with the same amount coming out of their IRA. Exactly. If you've got funds outside that you've been giving for, now you can use those for other uses and not live on your IRA distribution, but live on your other assets.

Excellent. Now we've said you have to be 70 and a half and have an IRA, but David, is this just for very wealthy people? Can people with any income take advantage of a QCD? Well it certainly is beneficial to the wealthy who have really large IRAs and can do this technique, but it's also really beneficial to people that don't have large IRAs but they want to be giving charitably and they can do this and get a tax benefit where they wouldn't because they're probably not itemizing. So it's really helpful for anybody that is charitably inclined and has an IRA. And go over that just for a second when you say they're not itemizing. So most people take the standard deduction, but this is a way to benefit them despite that because they're not recognizing this as income, which has no effect on that, right? That's exactly right.

Yeah, very good. All right, David. Well, we've covered a lot of ground in a short period of time, but let me just underscore this idea, folks. This is perhaps the best giving opportunity that you're not taking advantage of if you have an IRA and you're over 70 and a half.

So consider a qualified charitable distribution. David, thanks for stopping by. Thanks so much, Rob. That was David Hogan.

David is principal with Clifton Larson Allen CPAs in Atlanta. All right, we're going to head to a break, so don't go anywhere. Still a lot more to come. Even though we're away from the studio today and you shouldn't call in, we have some great questions that you're really going to enjoy as we continue to apply God's wisdom to your financial decisions. We'll be right back. This is Faith in Finance Live with Rob West. Hey, if you hear a phone number mentioned today, please ignore that number and don't call us, because today's broadcast was previously recorded.

But we think the upcoming information will help you and make you a wise steward of what God's given you, so please stay tuned. In the news, the median selling price of American homes has hit a new high despite a recent increase in mortgage rates to over 7%, as you well know. According to the real estate firm Redfin, the median price, meaning half of homes sold lower, half higher, reached $383,725 over the last month. The median asking price rose 6.7% to $415,925, and again that's with an average 30-year fixed mortgage rate at 7.1%. So things are definitely not getting easier for prospective homebuyers. Inflation and low inventories of homes for sale are keeping prices high, making homes unaffordable at a higher rate than ever. Nearly 30% of homes are still selling above the asking price, while only 6% are selling below the asking price.

There's a good bit of good news in this. New listings rose over 10% in the last month, and that could have a cooling effect on prices as the inventory of homes increases during the summer buying season. Of course, lack of inventory has been one of the key drivers in keeping the housing market where it is, despite these high interest rates, at least high relatively speaking based on the last 20 or 30 years. Interesting news out. I know it's challenging for those who own homes, obviously you're enjoying that rise in home equity, especially if you have a low mortgage rate.

Those entering, though, the housing market are really struggling, especially alongside other expenses up across the board. Interesting data that Bob Doll shared with me is that he looked at a basket of groceries. If you take the same basket of groceries, a representative sample of a typical grocery cart, those prices during the Biden administration, three and a half years, are up 21% over that period of time. If you go and look at that same basket of groceries during the Trump administration, four years, it was up about, well, less than 7% during that four year span.

So one up less than seven this current period, three and a half years up 21%. That's real. And Americans are feeling that that alongside significantly higher premiums for auto insurance, not to mention, you know, a whole host of other areas, including housing, is just making it really challenging, which is why it's more important than ever that you are creating a spending plan living within your means tracking the money that you're managing for the Lord because you're a steward. And one way to do that, by the way, find the way that works for you. But one way is through the faith by app. It's what Julie and I use every day at any time I can tell you what we have left in any one of our digital envelopes, whether that's eating out or clothes for any of our four kids or, you know, entertainment, you know, all of those categories are there with a digital envelope, I can see in real time what's left.

And so I can make changes throughout the month, really important for you to stay on budget and have some margin, which is so precious for you to be able to accomplish your longer term goals. So if you'd like to download the faith by app, check it out yourself. Do that at faith phi.com.

Just click app that's faith f i.com click app or search for faith five faith and finance in your app store wherever you download apps. All right, we're ready to go to the phones. Let's go to North Carolina. Hi Olga. Thank you for calling.

How can I help? It's such a pleasure talking to you. Well thank you. That's very kind. I'm delighted to talk to you as well.

Yes, I have become became a widow about nine years ago and ever since I've been listening to you and learning so much and trying to, not trying, actually God has been such a blessing to me that I make very sound financial decisions and you guys teach us and guide us. So I really appreciate that. The help was enormous. Absolutely. Thank you for saying that. That means a lot.

Yeah, it does. It helps quite a bit for, especially for some of us who didn't deal with finances at all, which was my case. But I have a hundred thousand dollars in cash right now and I do not want to bet with this money.

I don't, it's, I've been saving it and it's hard earned and I want to do justice to it. I do not want to buy stock or anything like that. And my question is, would, I would like to put that either on the CDs, like short term CDs, seven months, a year CD or a saving accounts perhaps. And I go ahead and tell you, I did a little bit of a homework around my town and a regular banks do offer right now a 4.7% on the CDs or sometimes 5%. But my question is, are there online banks that do offer a higher yielding percentage? And I'll be honest with you, I'm a little bit afraid of it. If it's not a brick and mortar bank, that makes me a little nervous.

I don't want to lose the money. Yeah, I understand Olga. Well, first of all, thank you for your kind remarks about the program. It sounds like you're doing fabulous and I love the way you're thinking. And certainly, perhaps a combination of CDs and savings might make sense. This is the extent of your liquid reserves.

Is that correct? You don't have an emergency fund separate from this $100,000. I do have an emergency fund and I do have a house, I have no mortgage, thankfully my husband paid off that house. So and my food and my expenses are pretty all covered. So this is the money that is a surplus that I can invest. Great. And do you have at least six months worth of expenses in the emergency fund? I do. Okay, great.

All right. So with the $100,000, yeah, you're free to put this to work. And there's a couple of ways you could do that and keeping yourself on the very low end of the risk spectrum. You know, if we talk about the backing of the full faith and credit of the United States government, that's as risk free as you're going to get.

Nothing is completely risk free, but that's as close as you're going to get. And that would be true of high yield savings with FDIC insurance. That would be true of certificates of deposit with FDIC insurance. It would also be true of US Treasuries. So for instance, you could buy a 10-year US Treasury today, and you'll get your money back in 10 years.

You could sell it before then, but you may sell it at a profit or a loss, depending on what happens with interest rates. But if you held it for 10 years, you'd get your full amount back. And then every six months, they'd pay you the interest at the coupon rate, which today, I think the 10-year Treasury is at 4.6%.

That's pretty good, especially for 10 years. Now, you may say, listen, that's great, but I don't want to be locked in for that long. And I realize if I had to sell a Treasury before 10 years, depending on where interest rates are, I may sell it at a profit or a loss, and I don't want to do that. So that's where CDs and high-yield savings can come in. Can you do better than 5% on CDs?

You can, but not much. So if you have a local bank that's going to give you FDIC insurance at 5%, you probably want to take it. I mean, I'm looking at CDs right now of a year at 5.1, nine months at 5.3. So you can maybe even get to 5.4, but you are going to be with an online bank, no brick and mortar, but they will have FDIC insurance. So I think given that you're finding 5%, I'd probably stay there. The same is true with high-yield savings.

Now, you may need to use an online bank to get the rate you're looking for on the high-yield savings. Let's do this. I've got to take a break. We'll finish on the other side. Doreen, we're coming your way as well. Stay with us on faith and finance. We'll be right back. Hey, great to have you with us today on faith and finance live. I'm Rob West, your host.

Our team is away from the studio today, so don't call in. But coming up a little later, we'll have more of your questions right here on the program. Hey, let me take a moment to mention the FaithFi app. We'd love for you to download it. Just head to your app store wherever you download apps and search for FaithFi. That's faith F-I.

You can manage your money. You can access the best content in biblical finance, podcasts, articles, and videos. You can also participate in our FaithFi community where you can post questions and get answers from others on their stewardship journey. You'll find it in your app store. Just search for FaithFi or if it's easier, head to our website at faithfi.com.

That's faith F-I dot com and you'll see the app right there on the home page. Now let's head back to the phone calls we have lined up. Before the break, we were talking to Olga in North Carolina. She's got an emergency fund. Her home is paid off. She's a widow. She's living within her means.

Her husband and she handled God's money very wisely. She also has about a hundred thousand separate from her emergency fund that she'd like to put into something very safe. She was thinking about high-yield savings or CDs. She's found a local brick-and-mortar bank or credit union that will do five percent with FDIC insurance. And I was saying, you're probably not going to do a whole lot better than that, Olga, even with the online banks. Now with the savings portion, if you did want to have something more liquid, whereas maybe you take a portion of it and put it at seven months, maybe a portion at a year or 18 months, and you wanted to keep a portion completely liquid, that's where the high-yield savings would come in. That's where you're probably going to need to use online banks in order to get somewhere between four and a quarter and as much as five percent.

I'm comfortable with that because you could go with one that's close to five star rated. It would be FDIC insured. So there's really no difference in terms of even a brick-and-mortar bank can fail. We saw that with some of those isolated cases with Silicon Valley Bank a year or two ago. But the FDIC, the U.S. government stepped in, provided the liquidity, allowed the depositors to get access to their money, and that's their job. That can happen with a brick-and-mortar bank. It can happen with an online bank.

But as long as you have that FDIC insurance and you go with a highly rated bank, then I would be comfortable with you doing that so that you could get access to something close to or above five percent, even for high-yield savings. But give me your thoughts on that. I like that. I think diversifying a little bit, putting some there, some here would be good. And just to see how it works. Good.

All right. Well, the place I would go to find that bank that's right for you is bankrate.com. You can search the CDs. You can search the savings options. Again, it's bankrate.com.

And then you could compare that to what you're finding locally. If you want a bank that shares your values and even takes a part of their profits to support Christian ministries, you could check out joinchristiancommunity.com. That's the Christian Community Credit Union. I know more and more believers are wanting to align their banking operations and financial endeavors with organizations that align with their values.

Join Christian Community would be a great option there as well. Olga, thank you for your call and for your kind remarks about the program. Listen, stay on the line. I want to send you a book. It's called Wise Women Managing Money.

It was written by Miriam Neff after the passing of her husband Bob, specifically four widows who now are taking sole responsibility for stewarding God's money. And I think it'll be an encouragement as well as really practical. So we'll send Wise Women Managing Money out to you. Stay on the line. We'll get your information.

Let's go to Illinois. Doreen, go right ahead. Hi. Thank you for taking my call. I enjoy listening to you as often as I can. And I'm just amazed at your continuous positive voice. It is very encouraging. Well, I'm so glad to hear that. Thank you for saying that, Doreen. Yeah, you really have a lilt in your voice. And I know you love Jesus.

And I'm going to cry because I've been crying about everything lately, but I'm sorry. That's okay. We allow that too.

My question is very much like the person before me. We don't have that much. We don't have $100,000.

We have $20,000, which actually is our emergency fund, but it's only getting, you know, whatever it's getting at our credit union. And so I would like to use one of the high-yield savings accounts just to earn more money that way. I've never done that. And as I was telling the screener, it just makes me so every time I go, I get it all set up and then I back out because I just get nervous about it.

But I've heard, you know, I just heard you say that it's safe. It's back to pick one of the top ones and, but again, it's very, so my question is if I need that money, I can just transfer it back into our local bank here that there is no, it's just like a regular bank, is that correct? That's exactly right. And you know, more and more, even with a brick and mortar bank, we're doing more and more business online. So you know, there's really a difference between it being an online bank, which just means they have no brick and mortar operation.

So you're doing everything over the computer. And the easiest way to do that is with an electronic link to your primary checking account. So that way, whenever you need money, you're going in, you're transferring money and you know, two to three days later at the most, that money showing up in your checking account through what's called the ACH system, which is kind of the plumbing system of the interbank transfers that the all the banks use. And so it's real simple to do, you could also get a debit card against it and go to probably a pretty massive ATM network, depending on which, you know, online bank you choose and actually make a withdrawal using an ATM machine fee free.

So there's that option as well. And so there's online banks, and then there's online banking, which that, you know, is being done with both brick and mortar and online banks. And that's just the, you know, the functions where you're going in and transacting business online. So you're using bill pay or, you know, might be depositing a check through an app, a smartphone app. Well, that's online banking, you're probably already doing that. So you know, I don't really think there's any difference with you using an online bank, especially if on your $20,000, you could get an extra $1,000 a year.

So I'm on board with that Doreen and yes, you would just absolutely link it right up to your checking account and you can move money. Hey, you call anytime, you didn't cry, you were very kind and I'm delighted to talk to you today. We'll be right back on Faith and Finance. We're Faith and Finance Live and we talk about our telephone number often because we usually are live, but today the program is prerecorded. So if you hear a mention of the phone number, please don't call us, but you can find us online at faithfi.com. Hey, if you found value in this program, maybe you listen regularly, we've been an encouragement to you, you've found some advice that's been applicable to your life and you just couch yourself a part of the faith and finance family, well, I'd like to invite you to take another step in that journey. As a listener supported ministry, we can only do what we do on the air each day and so many other ways beyond these airwaves because of your generous support. And so there's a way you can stand with us as a FaithFi partner. These are the folks that have said, yeah, we're in the boat with you, we're a part of what you're doing, we want to see you continue and help more people with biblical wisdom around financial management. You can learn more about becoming a FaithFi partner when you go to faithfi.com and click give at $35 a month or more, we'll send you a quarterly update on the ministry, you'll get pre-release copies of our studies, our Rich Toward God study, our new study on financial fear and anxiety called Look at the Sparrow will be out this summer, you'll get that first, you'll get our new study on Ecclesiastes next fall when it comes out, you'll also get a quarterly update on the ministry as well. Learn more and sign up today to be a FaithFi partner with a monthly gift of $35 or more at faithfi.com, just click give, again to be a huge help to us, faithfi.com, just click give.

Thanks in advance. All right, let's head back to the phone. Let's go to Virginia. Hi, Marilyn. Go right ahead.

Yes, I have a question. Both my parents are in their 80s and my mom didn't really work a lot. She stayed home with us. And then my dad worked a job for a long time. And someone told her that if something happens to him, she cannot draw his social security and that she wouldn't be able to draw his pension. So I didn't know if there was something that they could do about the pension so she could draw it since he worked all those years and made that money.

Or if you could give me advice on any of this. Yeah, absolutely. So that's not correct on the first part related to Social Security. So your mother would be able to draw what are called survivor's benefits if your father passes away. Now, right now, while he's collecting his benefits, she could be drawing spousal benefits, which is up to half of his benefit. Is she drawing spousal benefits today? I don't think so.

Okay, so that's easy. And she could get, even if she doesn't have enough work record, it's not a matter of her having any work history. She just has the ability to collect half of his as what's called the spousal benefit. And that doesn't take anything away from his benefit whatsoever. That would just be incremental income. Now, if he passes away, she would then no longer take the spousal benefit, but she would get survivor's benefits, which is equal to his retirement benefits. So whatever he's getting today as Social Security benefits, she would begin receiving that as survivor benefits. And she would have to drop her spousal benefit because you can't get both.

So today, they could get both benefits. He gets his full benefit, she gets spousal benefits if she doesn't have her own work record equal to up to 50% of his. He passes away, she drops the spousal benefit, but she starts getting the survivor benefit, which is equal to his current retirement benefits, and then she'd continue to earn that for the rest of her life. Now, with the pension, that really comes down to whether there's what's called a survivor benefit for the pension. And if there is, then your mother would be eligible for that. So I would have them contact the pension administrator, or they could check the statements to find out if there's a survivor benefit. And that way, she would at least know, is this going to stop at his death? Or will I as his spouse and survivor continue to receive that?

And it could go either way. It just depends on the pension. Okay, well, that's been very helpful. Also, someone told him the other day that there's a thing now where you can, you have to apply for it. They don't just give it to you, it's extra $150 a month. Do you know anything about that?

What are we talking about? The pension or Social Security? Social Security? No, I mean, a lot of times Social Security will automatically kick in. In some cases, you do need to apply for it.

And so I would call Social Security on their toll free number, or you could visit the office. But if she's not receiving that spousal benefit, then she needs to apply to get it, because she's eligible if he's collecting benefits, as long as she's at least 62 years old. And if she's not getting it, she needs to apply to get it. Okay, so even though he's getting his Social Security, she can apply for what was it again? It's called a spousal benefit. Yep, spousal benefit. What does that do to his?

It does nothing. No, that's just an additional benefit that's available to her as a spouse of a worker who is receiving benefits. So as long as he's receiving his benefits, and as long as she's 62, and preferably full retirement age 67, then if she waits until her full retirement age, he's collecting his benefits, she can get up to half of his as a spousal benefit, and that doesn't reduce his one penny. So she should do that right away. And there's even an online way to do that.

So there's an online tool, if she goes to ssa.gov slash apply, ssa.gov slash apply, then she can apply for that spousal benefit, you know, right there online. Okay, yeah, they're both in their 80s, so, um, okay, well, great, well, thank you so much. You've been very helpful. I'm delighted to thanks for calling today. We appreciate it. Let's go to Alabama. Hi, Lisa. Go ahead.

Hi, sir. Yes, my question is, my mother has a home that is completely paid for and on her past and we were trying to figure out what is the best method for her for me to take over the house and it be put in my name? Yeah, well, there's two options. One is she leaves it to you in her will. And then you would get that you'd get the stepped up cost basis, which just means whatever her cost basis is, which determines whether there's capital gains tax, that would jump up to the cost basis as of the date of death, which is a good thing because now there is no gain if you were to sell it, or at least when you do sell it, that cost basis is now higher. And so you're going to pay less tax when you sell it down the road if you do, or she could put it into a trust, and you would get it through the trust.

What's the difference? Well, with a will, it's going to go through probate that can run anywhere from $2,000 to $5,000 in court costs. And it's going to take perhaps a month, two months, depending on how complicated it is and whether or not it's contested, could take longer. With a trust, it's going to cost you a couple of thousand dollars to create the trust and then the property has to be retitled in the name of the trust. But then you would be able to get the farm or the property immediately, and it doesn't go through the probate court, and it's not a part of the public record, and there's no probate court costs. And you could even take over in managing that as the trustee of the trust if she's incapacitated prior to her death, whereas with a will, there's no triggering events other than death.

Does that make sense? Yeah, she had also wanted me to ask you about a transfer of death, is that some kind of certificate? Sure, yeah. So let's do this. I've got to take a quick break, but we can talk about that right on the other side of it.

There is something called a transfer on death deed, and I'll explain that to you right around the corner. And then in Arkansas, we're coming your way as well as Carol, stay with us. This is our final segment of a faith and finance live program that we previously recorded.

Thanks so much for being with us today, and we hope you'll stick around and enjoy the rest of the program. Before the break, we were talking to Lisa in Alabama. She has a family farm. It's owned by her mother. She's wondering about the best way for that to be transferred to her after her mom's death. We talked about a will, we talked about using a trust, both of which would transfer with a stepped up cost basis, which is good for tax purposes. The trust would do that a little more efficiently outside of the probate court with less probate costs and could be transferred if her mom is incapacitated prior to her death.

The only downside is trust is a little more expensive, could run a couple of thousand dollars or more to put that in place. You mentioned, Lisa, that your mom wanted to know about a transfer on death deed. This is where, without a trust, the home is put in the name of a transfer on death deed.

So the deed would be updated with the county records office, and it's transferred outside of probate upon her death. The reason I didn't mention it, though, is the state of Alabama does not allow transfer on death deeds. So it's state by state. Some states do, some states don't. Alabama does not use the TODD. Her farm is actually, we sit on the state line, her farm is actually over the line in Tennessee.

Are they the same as Alabama? Okay. Let's look at that and see if a transfer on death deed is available.

I'll have my team look at that and see. I believe it is. I believe you can do it in Tennessee. No, I apologize.

Tennessee is one that does not recognize TODD deeds as well. Okay. Then now I'll come tell her that then. All right. We will look into that trust, and I thank you for all your advice and bless you.

You know what? And I'm seeing some conflicting information, so why don't you have her check with, this is the challenge with doing this on the fly, why don't you have her check with a real estate attorney? I'm seeing that it does not, but I'm also seeing one or two places that say they do.

I'm pretty sure they don't, but it's worth you checking with an attorney. So the next step I think, Lisa, is for her to visit with an estate attorney, make sure she's got the healthcare surrogate, make sure she's got an up-to-date will, and make sure she's got the power of attorney in the event something happens to her. And at the same time, you could talk about the farm and what's possible there, whether you go will, trust, or a TODD, even though I think that's not going to be an option. Hey, thanks for calling today. May the Lord bless you. We appreciate you being on the program.

Let's go to Arkansas. Hi, Ann. Thanks for your patience.

How can I help? I appreciate your program. Well, thank you very much. A couple of months ago, the company that administers my retirement fund notified me of a data breach, and they offered free monitoring through Quoals. I believe that was for two years, and I signed up for that. Well, this week our bank has notified us of a data breach, and they are offering free data monitoring through a company, CYEX, for 12 months.

I would like to know if they're a reputable company, and if it's advisable to have two different companies monitoring you at the same time. Yeah, yeah, that's a good question. Where are you in the Quoal free, you know, period? Are you still, do you still have a ways to go on that one?

Oh yeah, that started just a couple of months ago, and it was for two years. Okay. All right.

Very good. Yeah, so, I mean, here's my position on this. I don't think, unless you've been the victim of ID theft, or you have somebody who's willing to pay for it for you because of a breach, which seems like that's just kind of a rolling thing now because of how often that's happening. My opinion is there's no need to pay for credit monitoring as long as you're using best practices, checking your credit score, which you can do free now, at creditkarma.com, and even your website, or excuse me, your credit card, many of them will offer that. You're checking your credit reports on annualcreditreport.com three times a year, you're not clicking on phishing links, you're changing your passwords, you're not, you know, doing financial transactions on public Wi-Fi, like at a coffee shop. I mean, if you're doing those things, then, you know, I don't think you need to be paying for adding another subscription for credit monitoring. Now, the exception to that is, go ahead, most of these are free, yeah, and so for your case, I think, absolutely, somebody's offering it to you free, why not have that extra layer of protection? Do you know, Kroll is very reputable.

I'm not as familiar with, you know, Cyax, I know they are a legit company, I just haven't read any reviews on them. You know, does it hurt for you to have two? No, I don't think so, although Kroll is one of the big ones. And so I think they'll probably be sufficient. But if they're paying for it, you know, at least the new one would continue after Kroll drops off, because this is a new instance. So again, I don't think it's a problem, just make sure they're not automatically renewing it at the end of the free period, then all of a sudden you're paying for something that you didn't intend to. Is it bad to have overlapping monitoring? No, I don't think so, as long as somebody else is paying the bill.

Okay. So we have credit freezes with all three credit bureaus. So is there any point in us getting our credit reports? I think there is, because here's the thing, credit reports on occasion will have inaccurate information. So even if somebody hasn't compromised your account by opening a fraudulent account, because the credit freeze should take care of that, because the lender won't be able to access the credit file to approve the loan, there could be inaccurate information on there and you just don't know about it. So I think at least a couple of times a year, I'd go to annualcreditreport.com, pull it, just make sure there's nothing out of the ordinary that you think is incorrect.

It's less of an issue with a credit freeze, but I'd still do it. Okay. Thank you very much. All right, Ann, thank you for calling. May the Lord bless you.

Let's go to Florida. Hi, Karen. Thanks for your patience. How can I help? Thank you for your time.

How can I help you? So I received a capital gain from property that I had put through probate from my deceased brother. And I need to know if I need to pay taxes on that capital gain if I, if it was from a deceased family member. Yeah. So you inherited the property as a result of the family member's death, is that right? Yes. To be totally honest, it was willed to his daughter, but she couldn't take it. She lives in Maine. And so I put it through probate and became the successor of the property.

Okay. So as long as you received it as a result of a passing through the succession process and the court was involved in that and you're the legal owner of it, then you got the stepped up cost basis. So the, the new cost basis was as of the date of death. And then are you immediately selling it or did you hold it for a period of time? Yes, I had it for a period of time because it took time. And I was paying the mortgage and everything on it, but it took like almost a year to put it through probate. And then I just sold it last year. So I had it since 2019, I want to say.

Yeah. So you probably have some gains on it. And so you just need to establish that cost basis. Maybe you can have a get a broker's price opinion or, you know, some other way of establishing what was the market value as of the date of death.

Maybe that was done as a part of the probate process. And then you could compare that to what you sold it for and determine how much gain you have. Now, the whatever that gain is, is going to be subject to long-term capital gains rates as long as you held it for more than a year, which you did. And what year did you sell it? Was it 23?

Yeah, I sold it, I believe February of 23. All right. And do you file taxes as a single person or married?

Single. All right. And do you have income, adjusted gross income, not the gain, but your income more than $44,000? No. Okay. So if it's less than $44,626, your adjusted gross income for 2023, your capital gains rate is zero.

You don't get to the 15% rate, which is the next one up from zero until you get over $44,625 in income. Okay. I got you.

That makes sense. Thank you so much. I appreciate it.

They took a look off my mind. Okay, good. Well, thanks for your call today.

We appreciate you being on the program. You know, folks, as we think about our role in managing God's money, I mean, ultimately, what our goal is, is for us to see God as our ultimate treasure, that we would see our longing for abundance and fulfillment and purpose and meaning in God himself. It's not that he's the access to our abundance.

He is our abundance. And then he gives us this great privilege once we surrender our lives to him of being stewards. Well, we're all stewards of what God has bestowed upon us, our gifts and our talents and our time, our ability to create wealth, the Bible says comes from him, and the privilege of being his money manager. And so our goal is to be found faithful in that. And we do that by going to Scripture and seeing that, wait a minute, money can actually compete with our hearts and we can make it the object of our affection.

And that's not what it was created to be. It was created to be a good gift from God so we could provide and enjoy and give generously. And so we try to navigate all of these decisions every day, living within our means and avoiding the use of debt and setting some long-term goals, because the longer term the perspective, the better the decision we can make today. And having margin, some surplus so we can fund our goals of giving more, paying down debt or saving. And by the way, that margin or cushion is a key, the studies say, to getting past having conflict and marriage over money. It's not a matter of your income, it's a matter of whatever it is you're living below it. And then ultimately it's about giving generously.

Why? Because giving breaks the grip of money over our lives. It takes our eyes off of our own little mini kingdoms and raises our perspective, our sights toward the eternal kingdom, that which will last forever. That should be the object of our devotion.

We can't serve God and money, but when we give, it allows us to participate in God's activity and then the joy that follows is incredible. By the way, especially in these uncertain times, our generosity is a testimony to the world that's looking on to see how as Christ followers we're going to respond to the uncertainty and the chaos around us. Folks, I hope today's been an encouragement to you. I'm so grateful you've been along with us. Again, if you'd like to become a FaithFi partner, go to faithfi.com and click give.

It'd be a real blessing to us here and our team. Thank you to my team today, Amy, Dan, and Jim. Thank you for being here as well. Faith and Finance Live is a partnership between Moody Radio and Faith Fi. I hope you have a great rest of your day and come back and join us next time. We'll see you then. God bless you and God bless you. God bless you.
Whisper: medium.en / 2024-06-07 02:20:31 / 2024-06-07 02:38:20 / 18

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