Non-cash property – surprising benefits from giving stocks and other Assets. Property such as stocks, mutual funds, real estate and other Assets may help you make gifts of equal value to your planned cash gift at a lower cost to you. Here’s how:
GIFTS OF APPRECIATED SECURITIES
Stocks, including mutual funds, many types of bonds, and other publicly traded securities that have increased in value make excellent gifts. Current tax laws provide a way to make a substantial gift at a low after tax cost.
If you have property that has increased in value and you have owned it long enough to qualify as long-term capital gain property, you might consider using such an asset to make a charitable gift.
When you give appreciated property, you may receive a deduction for the full value of the asset, while you avoid the capital gains tax that would have been due if you had sold the property. With capital gains taxed as high as $.28 per dollar of gain for federal tax purposes, this can be a significant savings (currently). You may generally deduct gifts in the form of appreciated property up to thirty percent of your adjusted gross income (check with your accountant).
When property has decreased in value. If you have securities that have dropped in value, it is usually best to sell them and give the cash proceeds. You can then be able to claim the capital loss AND deduct the charitable gift of the cash proceeds of the sale.
When property has fluctuated in value. During periods of stock market fluctuation, you may own stock that has increased in value, then experienced a loss. It may still be worth more than you paid. In this case, making a gift of the stock and repurchasing with available cash to establish a new “cost basis” may be the best tax planning strategy.
By establishing a new cost basis, in the case of a stock decline, you now have a capital loss For tax purposes. If it increases, you have less gain to report on a subsequent sale (seek counsel from your tax advisor/accountant).
GIFTS OF REAL ESTATE
Basically, the tax benefits available for gifts of appreciated real estate are identical to gifts of appreciated securities. First, you avoid paying the capital gains tax on the profit. Second, you receive an income tax deduction for the full-appraised value of the real estate.
In addition, you may reserve the right to either live in the property as long as you live, or during the lifetime of your surviving spouse. Such an arrangement permits a current income tax deduction for a portion of the fair-market value of the property.
We are currently seeing 10 – 20 acres of property in the South Florida area. This will enable us to eventually pursue our vision where families that are grieving have a safe place to go and help heal their broken hearts.
Every hour of every day, another child leaves this world too soon, leaving behind – broken hearts and shattered dreams. With your help and support, our dream will become a reality. Together, we WILL make a difference in the lives of others!
Other properties to give include collections of value, works of art, Jewelry, Antiques, and other personal property which may also make Practical and meaningful gifts. The amount of your allowable deduction depends on the appraised value of the property and how the gift will be used.
GIFTS OF LIFE INSURANCE
Life insurance needs change as life continues. Children become self-sufficient, and in many instances investments provide income and security. After such developments, some life insurance coverage may no longer be needed. One of the simplest ways to make a significant future gift is to name The Bobby Resciniti Healing Hearts Foundation as beneficiary to receive all or part of the proceeds of the policy.
To receive a tax deduction you should designate The Bobby Resciniti Healing Hearts Foundation as the owner and beneficiary of the policy. Additionally, if you continue to pay the annual premiums, the amount of the premiums will be tax deductible each year.
There are actually several methods to make a gift of life insurance. Your attorney, accountant or other advisor will tailor an arrangement to meet your estate or financial plan.
LIFE INCOME PLANS
These deferred or planned gifts are ways of making a significant contribution to The Bobby Resciniti Healing Hearts Foundation while providing you with an immediate tax deduction and with income for life. The gift may also be funded with securities or other property.
This may be accomplished by making a gift through a trust arrangement called an “Annuity Trust” or ‘Unitrust”. Through either arrangement you may:
- Avoid income tax on appreciated property used to fund the gift;
- Receive the income earned by the gift for life (may include another designated beneficiary);
- Increase income for your family;
- Defer income until retirement;
- Avoid gift tax; and
- Reduce estate settlement costs.
CHARITABLE ANNUITY TRUST
An ANNUITY TRUST is an arrangement whereby you irrevocably place money or other property with a trustee, with instructions to pay you or someone else income, generally for life. Under an annuity trust, you or a designated beneficiary (or both) receive a fixed sum annually. The amount is agreed upon by the donor and the trustee at the time the gift is established.
The income payments you receive each year will be at least five percent of the amount placed in trust. The size of your tax deduction will depend on your age, payment percentage, and other factors.
CHARITABLE GIFT UNITRUST
Like the annuity trust, the CHARITABLE REMAINDER UNITRUST provides a gift that returns income. Under this arrangement the donor or other beneficiary receives a percentage of the fair-market value of the trust assets. Thus, the income from a unitrust may rise or fall from year to year.
Additions may be made to this trust, and a tax deduction is allowed, for a portion of each amount contributed. In light of the fact that IRAs and other retirement plans are now limited, the unitrust might be an alternative to provide for your retirement years.
CHARITABLE LEAD TRUST
Essentially the reverse of life income plans; the CHARITABLE LEAD TRUST pays income from the fund to The Bobby Resciniti Healing Hearts Foundation for the number of years you designate. At the end of the designated time period, the trust terminates and the assets are transferred to the person you name.
The Bobby Resciniti Healing Hearts Foundation may be named as a beneficiary in your will. A testamentary bequest is a traditional way to provide for our programs. This method allows you to retain full use of your gift during your lifetime. Further, depending upon the value of your estate assets, the bequest may qualify as a deduction for estate tax purposes.
There are a number of common forms of bequest. For example, you might consider an outright gift of funds, either a specific dollar amount or a percentage of your estate. Alternatively, The Bobby Resciniti Healing Hearts Foundation might be named as secondary beneficiary to receive the residual of your estate.
WOULD YOU LIKE TO KNOW MORE?
The Bobby Resciniti Healing Hearts Foundation does not render tax or legal advice. For specific answers to your tax or estate planning questions, we advise you to consult with your attorney, accountant or other professional adviser.
Thank you for your interest in The Bobby Resciniti Healing Hearts Foundation. For further information on The Bobby Resciniti Healing Hearts Foundation, please contact Bob Resciniti, President (561) 603-3819 or by email at Bob.Resciniti@AngelBobby.com