Key Takeaways:
- Year-end moves like charitable giving, gifting, and tax-loss harvesting can significantly reduce taxes and preserve wealth.
- Timing is critical — most strategies must be executed before December 31 to count for the current year.
- Coordinating estate, investment, and deferred income strategies helps achieve the greatest impact while avoiding common pitfalls.
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For celebrities and high-net-worth individuals, the end of the year isn’t just a time for reflection — it’s a crucial window for financial action. Large, irregular income streams, concentrated investments, and complex estates mean that every December decision can affect your taxes and long-term wealth.
From charitable giving to deferred income strategies, the moves you make now can position you for both immediate savings and a stronger financial future.
5 Strategies to Strengthen Your Year-End Tax Position
Here’s how you can take smart, timely action before the calendar flips:
1. Make Full Use of Charitable Giving
Charitable contributions are more than good deeds — they’re powerful tax tools. By contributing to donor-advised funds (DAFs), bunching gifts, or donating appreciated securities (gifting appreciated stock) before December 31, you can reduce your taxable income while supporting causes you care about.
Donor-Advised Funds
DAFs give you a flexible way to make a large charitable contribution now while deciding which organizations receive the funds later. If you’re planning a significant gift — for example, contributing $10 million during a high-income year — a DAF lets you capture the full deduction up front while spreading grants to charities over time.
Because contributions of appreciated securities receive a step-up benefit inside the fund, you avoid capital gains tax on appreciation and take full advantage of the dollars available for giving. For many high-income taxpayers, a DAF becomes a strategic tool: you reduce taxable income when it matters most and support the causes you care about on your own timeline.
Bunching Gifts
“Bunching” gifts — combining multiple years of contributions into one — can help you exceed standard deduction thresholds and amplify your tax benefit. Even small adjustments now can translate into meaningful savings when coordinated with your overall financial plan.
Gifting Appreciated Stock
Donating appreciated securities directly to a charity generally provides two major tax advantages compared to selling the stock and then donating the cash:
- When you contribute long-term appreciated securities directly to a DAF or any 501c3 organizations, you can deduct the full fair market value of the stock (subject to 30% adjusted gross income (AGI) limits), even though you never paid tax on the appreciation.
- By transferring the shares to a charity or a DAF instead of selling them personally, you completely avoid capital gains tax, which means neither you nor the charity pays tax on the appreciation. This is one of the greatest deductions available in the tax code today!
Charitable Deduction Haircut Starting January 1, 2026
Under the One Big Beautiful Bill Act, there will be a slight “haircut” of 0.5% of AGI to the deductible portion of charitable contributions being itemized starting in 2026.
- Non-itemizers: Individuals who do not itemize may now claim an above‐the‐line deduction of up to $1,000 (single) or $2,000 (married filing jointly) for cash contributions (excluding donor‐advised funds).
- Itemizers: Those that itemize their deductions will be subject to a new floor — the aggregate of contributions must now exceed 0.5% of AGI before any deduction is allowed.
- High-income taxpayers: For taxpayers in the highest marginal bracket (37%), the tax benefit of charitable deductions is capped at $0.35 per dollar donated, down from $0.37 per dollar in previous years.
In contrast, if you sell the stock first, you must recognize the gain and pay capital gains tax — leaving you with less after-tax cash to donate and therefore a smaller charitable deduction. As a result, donating appreciated stock directly to a charity, DAF, or even your own private foundation is the most tax-efficient way to support charitable causes while maximizing both the deduction and the value of the gift.
2. Gift Strategically to Family and Heirs
The annual gift tax exclusion lets you transfer up to $19,000 per recipient or $38,000 per couple (that amount is valid for both 2025 and 2026 tax years) without using any part of your lifetime gifting estate tax exemption of $15 million (the new level as of January 1, 2026). Year-end gifting is a direct, timely way to reduce your taxable estate for those with total assets over the $15 million level (or $30 million for couples).
You can also pay tuition or medical bills directly through the institution, bypassing gift limits entirely. These moves must be completed by December 31 to count for this tax year — so acting now is essential.
3. Tax-Loss Harvesting and Investment Moves
Offsetting capital gains with losses on underperforming assets is a tried-and-true year-end strategy. For concentrated positions — common for celebrities with equity in businesses or entertainment royalties — consider exchange funds or opportunity zone investments to defer gains while diversifying.
Timing matters: transactions must settle before year-end to affect your current tax return. Strategic planning with your financial advisors can help you act efficiently and capitalize on available opportunities.
4. Review Deferred Income and Business Transactions
If you have bonuses, royalties, or other variable income, you might be able to defer these payments until next year — keeping you in a lower tax bracket this year. Similarly, for business owners or those recently selling a company, structuring deals as installment sales or earn-outs spreads your income tax liability over multiple years.
Late-year reviews can reveal opportunities to accelerate deductions or delay income, directly affecting your tax outcome.
5. Year-End Estate and Trust Moves
While some trust and estate strategies require months to implement, certain moves can still make a difference before December 31. Funding irrevocable trusts, making contributions to grantor trusts, or updating estate documents can reduce your taxable estate and set your legacy on the right path — especially if particular assets are going to appreciate greatly over the next few years.
Even small, well-timed contributions can provide meaningful long-term benefits.
Common Risks and Pitfalls
Even the most effective strategies can fall short if key details are overlooked — here are some common risks to watch for:
- Waiting too long: Miss the December 31 deadline and deductions or gifts may not count for this year.
- Documentation errors: Incomplete records for gifts or charitable contributions can trigger IRS scrutiny.
- State and local tax exposure: Moving income or assets without considering state laws can backfire.
- Strategy overlap: Uncoordinated moves between gifting, charitable giving, and tax-loss harvesting can dilute benefits.
How MGO Can Help
Our Entertainment, Sports, and Media team helps celebrities and high-net-worth individuals take advantage of year-end strategies while protecting long-term wealth. From estate and trust planning to tax-loss harvesting, charitable giving, and deferred income structuring, our advisors coordinate your full financial picture so every move supports your ultimate goals.
By acting now, you can capture this year’s tax benefits, position strategies for next year, and reduce exposure to common pitfalls. Reach out to our team today to explore customized year-end strategies that help you preserve wealth, reduce taxes, and move into the new year with confidence.