Gifts of Cash
One of the easiest ways to obtain a charitable deduction and to support WGA is with a gift of cash. If you itemize on your taxes, 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 within a single year should exceed this limit, the difference may be carried forward for tax savings for up to five additional years. If you would like to make an online donation now click here.
Gifts of Stock
Giving long-term appreciated stock offers you two methods to save on taxes. First, you avoid paying any capital gains tax on the increase in value of your stock. Second, you receive a tax deduction for the full fair market value of the stock on the date of the gift. For income tax purposes, the value of the stock gifts may be deducted up to 30% of adjusted gross income. This also has a five-year carry forward feature.
Gifts of Real Estate
If you have owned your home, vacation home, land, or farm for many years, a charitable gift of real estate can be especially advantageous. The property may have appreciated in value over the years such that its sale would result in a sizeable capital gains tax. If given to WGA, you avoid the tax and realize a charitable deduction for the full fair market value of the real estate.
You may also consider giving the gift of real estate while continuing to live in the house or farm for life and for the lifetime of your surviving partner. Through this type of arrangement, you will be entitled to a current income tax deduction for a portion of the fair market value of the property. See your tax advisor for details.
Gifts of Life Insurance
If you own a life insurance policy that is no longer needed, consider it as the perfect vehicle for a year-end charitable gift.
To receive a charitable deduction, name Where Grace Abounds as both the policy owner and the 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 it is a policy with annual premiums that you continue to pay, those premiums will become tax-deductible each year. Your life insurance agent can provide you with the forms to be completed.
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
- Avoid capital gains tax on the appreciation if you contribute stock
A life income gift is often made through a trust arrangement known as an “annuity trust” or a “unitrust.” An annuity trust allows you and/or your beneficiary to receive a fixed amount from the trust each year. You decide this amount when you create the trust, and it stays constant regardless of fluctuations in interest rates or the stock market. With a unitrust, you and/or your beneficiary receive a fixed percentage of the fair market value of the assets in the trust. The amount of the income will vary annually based on how the trust assets investments perform.
If you have already considered including Where Grace Abounds in your will, please keep in mind that a life income gift may be a more beneficial option. Such a gift allows you to achieve your goals during your lifetime and provides more tax advantages.
As you are considering your income tax savings, this may also be a good time to consider long-term tax savings. Where Grace Abounds hopes you will consider a charitable bequest in your will while you save estate tax dollars.
For More Information
Be sure to check with your accountant, attorney, financial planner, or other tax advisor for additional information and for recommendations regarding which gift opportunities will be most advantageous for your situation.