Planned Giving Opportunities: Click a topic to learn more  Gifts of StockGifts of Real EstateGifts of Life Insurance  GIFTS OF STOCK If you own stock, it is often more tax-wise to contribute stock than cash. This is because a gift of appreciated stock generally offers a two-fold tax saving. First, you avoid paying any capital gains tax on the increase in value of the stock. Second, you receive an income tax deduction for the full fair market value of the stock at the time of the gift. If you purchased some stock many years ago for only $1,000, and it is now worth $10,000, an outright gift of stock to us would result in a charitable contribution deduction of $10,000. In addition, there is no tax on the $9,000 appreciation in value. Make sure you have owned the stock for a “long-term” period of time (this generally means that you have held the stock for 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 for this year is $100,000, up to $30,000 of long-term appreciated stock and other property gifts may generally be deducted this year. Any excess can generally be carried forward and deducted over as many as five subsequent years. Always check with your accountant or other tax advisor for the advantages (and possible drawbacks) of making a planned gift, based upon your particular circumstances. GIFTS OF REAL ESTATE A gift of real estate can also be tax-wise. A residence, vacation home, farm, acreage, or vacant lot may have so appreciated in value through the years that its sale would mean a sizeable capital gains tax. By making a gift of this property instead, you would avoid the capital gains tax, and, at the same time, receive a charitable deduction for the full fair market value of the property. It is also possible to make a gift of your home, farm, or vacation home so that you and your spouse can continue to use it for your lifetimes—while you receive a current income tax deduction. Example: Mr. and Mrs. Smith own a vacation home in the mountains that they would like to continue using. Its fair market value is $100,000. By contributing the home to us now, but retaining the exclusive right to use it for the rest of their lifetimes, the Smiths are able to achieve a current income tax charitable contribution deduction of approximately $25,000. (The precise amount will depend upon their ages, the useful life of the house, and other factors.) GIFTS OF LIFE INSURANCE A gift of life insurance can provide a significant charitable deduction. You could purchase a new policy or donate a policy that you currently own but no longer need. To receive a deduction, designate us as both the owner and beneficiary of the life insurance policy. Check with your insurance agent for the details. Mr. Anderson owns a $100,000 life insurance policy with a current cash value of $34,582. By transferring the policy to us as the new owner and beneficiary, Mr.Anderson is able to receive a current charitable deduction in the amount of $34,582. If Mr. Anderson decides to continue paying the premiums on the policy after the gift is made, these additional premium payments will be tax deductible each year.
Questions? Please contact NumbersUSA's Help Desk or call (703) 816-8820 ext. 2857 to speak with Patti Brown about making a tax-deductible donation. |