Options for Giving—Current Gifts
- Tax deductible if donor itemizes deductions.
- Up to 50 percent of adjusted gross income can be deducted in any one year.
- Excess can be deducted over the next five years.
- Actual savings depend on tax rate.
- The higher the tax rate, the greater the savings.
- Payable over a three to five-year period.
- Deductible in the year a payment is made.
- Takes advantage of programs offered by many employers.
- Leverages donor's gift to a higher level.
- If qualified as a long-term capital asset (a year and a day), property should be given outright.
- Avoids payment of capital gains tax due if property were sold.
- Deduction given for full value of property, limited to 30 percent of adjusted gross income.
- Excess beyond 30 percent can be carried forward for five years.
Property That Has Lost Value
- Donor sells the property, takes loss for tax purposes, then contributes the cash received from sale.
- Deduction given from both the loss and the charitable gift.
Closely Held Stock
- Produces a current tax deduction equal to fair market value of the stock.
- Corporation may redeem shares of the stock from your institution.
- Could reduce liability for accumulated earnings tax.
- Possible for donor to make gift of residence, farm, or vacation home, reserving right of occupancy as long as donor and spouse live.
- Irrevocable gift qualifies for immediate tax deduction based on present value of remainder interest.
- Assign directly to the organization or, preferably, transfer through broker.
- Amount of contribution is fair market value on the date of transfer.