Gifts of Cash
There's no easier way to garner a charitable deduction and support us at the same time than by simply writing a check. Some employers will match charitable gifts, meaning your gifts are worth even more. If your company or firm has a matching gift program, simply enclose the form along with your check. If you itemize, your outright gifts of cash are fully deductible for federal income tax purposes up to 50% of your adjusted gross income. If your total gifts should exceed this limitation, any excess can generally be carried forward and deducted over as many as five subsequent years.
Example: If you make a charitable gift of $10,000, you can save $3,300 in taxes if you are in the 33% tax bracket. And the higher your tax bracket, the more money you save with a charitable gift.
Gifts of Stock
Giving long-term appreciated stock offers you a two fold saving. First, you avoid paying any capital gains tax on the increase in value of your stock. In addition, you receive a tax deduction for the full fair market value of the stock on the date of the gift. Make sure you have owned the stock for a long-term period of time, generally more than one year, to qualify for these significant tax advantages. Gifts of appreciated stock are fully deductible up to a maximum of 30% of your adjusted gross income. For example, if your adjusted gross income is $100,000, up to $30,000 of long-term appreciated stack and other property gifts may generally be deducted. Any excess can generally be carried forward and deducted over as many as five subsequent years.
Example: If you purchased some stock many years ago for only $1,000, and it is now worth $10,000, an outright gift of the stock to us would result in a charitable contribution deduction of $10,000. In addition, there is no capital gains tax on the $9,000 of appreciation.
Gifts of Real Estate
If you have owned your home, a vacation home, acreage or a farm for many years, a charitable gift of that real estate can be especially tax- advantages. The property may have so appreciated in value over the years that its sale would result in a sizeable capital gains tax. If given to us instead, you avoid the tax and at the same time realize a charitable deduction for the full fair market value of the real estate. You may also wish to consider a gift of your personal residence or farm, reserving the right to continue to live in the house or farm the property for life, and if applicable, the lifetime of your surviving spouse. Through such an arrangement, you will be entitled to a current income tax deduction for a portion of the fair market value of the property.
Gifts of Life Insurance
If you own a life insurance policy that is no longer needed, consider it as the perfect vehicle for a charitable gift. To receive a charitable deduction, name us as both the owner and beneficiary of the policy. If the policy has a cash value, you can take a charitable deduction approximately equal to the cash value at the time of the gift. In addition, if annual premiums are still to be made and you continue to pay them, those premiums will become tax deductible each year. It’s easy to contribute a life insurance policy to us. Just check with your life insurance agent for details on which forms to complete.
Life Income Gifts
If you are considering a major gift, your gift of cash or stock in the form of a life income gift can significantly increase your income.
A life income gift allows you to transfer assets now, and yet continue to receive income from the cash, stock, or other property contributed. A life income gift can allow you to:
- Increase your income for life
- Receive a generous charitable contribution deduction
- If you contribute stock, avoid any capital gains tax on the appreciation
A life income gift is often made through a trust arrangement called a unitrust or an annuity trust. With a unitrust, you and/or your spouse - or another beneficiary - receive annually a fixed percentage of the fair market value of the assets in the trust. The income received will vary from year to year, based upon how the trust’s investments perform. With an annuity trust, you and/or your spouse - or another beneficiary - receive a fixed amount from the trust each year. This amount is agreed upon when you create the trust; it stays constant, no matter what happens with the stock market or interest rates.
If you have already considered a provision for us in your will, please note that a life income gift can often be preferable. Such a gift allows you to accomplish your goals during your lifetime and in a tax advantaged way. Please consult with your tax planner for details.
Bequests
While you’re considering you future income tax savings, this may be a good time to consider long-term tax savings. The federal state tax can still take approximately 50% of one’s estate at the time of death. That’s a higher tax bite than the income tax. It definitely pays to do some advance planning with your attorney and other professional advisors. We hope you will consider a charitable bequest in your will to benefit us while you save estate tax dollars at the same time.
Tax Wise Tip: If you’re at least 70 ½ , new tax legislation allows you to give us up to $100,000 directly from your IRA without triggering federal income taxes. The gift will also satisfy the rules for required minimum distributions for the year.
