Gifts of cash are fully deductible up to a maximum of 50% of your adjusted gross income. For example, if your adjusted gross income for the tax year is $50,000, up to $25,000 of charitable gifts may be deducted for the tax year. Any excess can generally be carried forward and deducted over as many as five subsequent years. Make a gift to toward Environmental Education in honor or in memory of someone today!
Companies Match Gifts
Some employers will match your 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.
Gifts of Stock: How to avoid capital gains
If you own stock, it is almost always 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 charitable deduction for the full fair market value of the stock at the time of the gift.
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.
Gifts of Real Estate: Homes, Vacation Homes, and More
A residence, vacation home, farm, acreage, or vacant lot may have so appreciated in value through the years that its value would mean a sizeable capital gains tax. By making a gift of this property instead, you would avoid the capital gains tax at the end of the year, 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 tax deduction in the tax year.
Gifts of Life Insurance: A Good Policy For Giving
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 the Chattanooga Arboretum and Nature Center as both the owner and beneficiary of the life insurance policy. Check with your insurance agent for details.
Life Income Gifts
You could transfer cash of stock to CA&NC and establish a “charitable remainder unitrust” or “charitable remainder annuity trust” that would provide you with a 5% or greater annual return. This income would be paid to you and/or a loved one for life, after which the assets would be distributed to CA&NC. Through such an arrangement, you would be increasing your income and making a meaningful (and tax-deductible) contribution to CA&NC at the same time.
The federal estate tax can still take approximately 40% to 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 CA&NC while you save estate tax dollars at the same time.
* This information was derived from: Sinclair, Townes & Company Fund Raising Counsel: ”Growing Your 2005 Annual Fund Major Gifts & Planned Gifts”