Hartford Business Journal

www.HartfordBusiness.com • November 26, 2018 • Hartford Business Journal 21 HARTFORDBUSINESS.COM POLL LAST WEEK'S POLL RESULT: Will hydrogen vehicles catch on in Connecticut? NEXT WEEK'S POLL: Will Opportunity Zones be a significant economic-development tool in CT? To vote, go online to hartfordbusiness.com BIZ BOOKS Leadership skills that drive results By Jim Pawlak "Leadership Skills that Inspire Incred- ible Results" by Fred Halstead (Career Press, $16.95). Halstead, with decades of experience as an executive-search consultant and executive coach, be- lieves "respecting other people" makes leaders trusted and effective. He states, "When we show respect for others, we listen more effectively; we teach others to problem solve on their own; we hold them to high expectations thereby building their confidence." His quote serves as the section dividers of the book. "Listen more effectively" — When you dominate a conversation, the other parties don't believe you value their input and they tune you out. Listening promotes understanding. Listening involves more than the ears; the speaker's tone, inflections, facial expressions and body language convey meaning, too. To show you're listening while another is talking, send signals like an affirmative nod, a smile or a simple question (as long as it doesn't contain a "but"). Reinforce the fact you listened by responding using paraphras- ing ("As I under- stand you, … ") or summarizing ("It sounds to me like you're … ") what you heard. This keeps the other party engaged and moves the conversation forward. "Problem-solving on their own and holding them to high expectations" — Paint the big picture with the "what" and the "why." When it comes to the "how," ask, don't tell. Thought-provok- ing, open-ended questions encourage thought-through responses. Those questions require people to do their homework and recommend a course of action. By emphasizing their responsibility to create solutions (the "how"), you increase their willingness to take initiative. This shows that you respect their ability to produce results, which increases their self-confidence and motivation. When results are achieved, ac- knowledge those involved by calling attention to specific things they did. Acknowledgement builds their confi- dence, which prepares them for their next "how." 67.4% No 32.6% Yes READER COMMENTS: "Maybe over a long term, but hydrogen vehicles will likely suffer the same concerns as natural gas — lack of fuel density leads to diminished vehicle range and cost at times is higher than gasoline." "Hydrogen is a much better alternative to gas than electric. Range is farther and when you get low it's a matter of filling up and you're on your way again." Jim Pawlak Book Review EXPERTS CORNER Still time for year-end charitable strategies By Paul M. Kuveke III T ax and charitable planning in 2018 may be very different for Connecticut residents due to the Tax Cuts and Jobs Act (TCJA) of 2017. The good news is that there is still time to take advantage of effective charitable-giving strategies. One change to be aware of is the increase in the standard deduction to $12,000 for single filers and $24,000 for married people filing jointly. Along with this came a significant reduction in what could be itemized. A second major change impor- tant for Connecti- cut residents is the new $10,000 limitation on de- ductions for state and local taxes (SALT). With high property and state income taxes, this new limitation means that fewer people will utilize itemized deductions when calculating their federal taxes. Why is this important? Charitable deductions fall into the category of itemized deductions. If people use the standard deduction instead of item- izing, charitable contributions will not reduce their federal income taxes. So, what are people doing to give to their favorite charities and take ad- vantage of the new law? One concept is to bunch several years of future charitable contributions together and make a gift to a Donor Advised Fund (DAF). A DAF is a charitable account so the donation is treated as a completed gift for tax purposes. People receive a tax deduction in the year a contribution is made and then they direct grants to charities of their choice over time. People who use this strategy will have higher charitable deductions in 2018 greater than the standard deduction limit so they can itemize. In future years, they can then direct annual gifts from the DAF charities and not worry about itemizing. This is a win, win situation for the donor and the charity. Under the new law, the deduction for donations of cash was increased to 60 percent of adjusted gross in- come (AGI). Deductions for donations of appreciated long-term capital gain assets remain the same at 30 percent of AGI. If you plan to make larger-than-nor- mal contributions in 2018 to be able to itemize, be careful not to exceed the annual 60 percent cash limit unless you will be able to itemize in future years too. Otherwise any carryover deductions may be wasted. The most tax-valuable asset to gift to a charity is an appreciated asset. Many of our clients are Connecticut residents who work for public compa- nies such as IBM, Praxair and Pepsi. Some have donated company stock to both DAFs and local charities produc- ing significant tax savings. Many char- ities and DAFs accept contributions of non-cash assets including appreciated publicly traded securities, restricted stock, private equity and real estate. Sometimes, a charity of your choos- ing can't operationally handle the donation of a complicated asset and a DAF can be used as a "conduit charity" to get the donation to the intended charity. While there are IRS limits to consider, the benefits of donating appreciated assets can be meaningful, including avoidance of capital gains taxes. Another great idea for people over age 70.5 is to take advantage of a Qualified Charitable Distribution (QCD) from an IRA. Deductions up to $100,000 per year are allowed for direct contributions to a charity from the IRA. This donation must be made from an IRA and not from a 401(k) plan or other type of qualified retirement account. This could be an excellent alterna- tive for people who cannot fully take advantage of itemized deductions. A properly made donation can satisfy the person's required minimum distri- bution (RMD) while avoiding income taxes on normal distributions. Paul M. Kuveke III is the director of private wealth at Procyon Partners LLC in Shelton. Paul M. Kuveke III

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