Tower Topics ~ Winter 2002

Ideas for giving at year end

A gift to us demonstrates your belief in our mission and reinforces your commitment to making a difference in the world. Many types of gifts allow you to fulfill your charitable intentions and may result in immediate and possible future benefits for you.

Gifts of Cash
Cash contributions are deductible as an itemized deduction in the year you make the donation, up to a total of 50 percent of your adjusted gross income. Excess charitable deductions can be carried forward for up to five additional years.

Gifts of Securities
The best stocks to donate are those that have increased greatly in value, particularly those producing a low yield. In order to preserve tax advantages, it is critical that you transfer the physical securities to us rather than the proceeds from a sale.

Appreciated securities. If you donate stock that has risen in value and that you’ve held for more than one year, you pay no capital gains tax on the transaction and are entitled to a charitable deduction for the full fair market value of the stock. (Your income tax deduction is limited to 30 percent of your adjusted gross income. Any excess can be carried forward for five additional years.) If you wish to keep a certain stock in your portfolio, you could donate the stock and then use cash to buy the same stock, thus increasing your cost basis to current fair market value.

Depreciated securities. If you have stock losses, generally you should not contribute the stock, but rather sell the stock yourself to realize the loss for tax purposes. You can then contribute the cash and take a charitable deduction.

Mutual funds. A charitable contribution of mutual fund shares can provide the same tax advantages as a gift of appreciated stock. Due to the complexities involved in the transfer of mutual fund shares, we encourage you to begin the transfer process well before December 31.

Gifts of Life Insurance
You can contribute a life insurance policy to us by naming us either as the owner of the policy or simply as the beneficiary. If you name us as owner and beneficiary, you will be entitled to an income tax deduction limited to the lower of the value of the policy or your cost basis in the contract. In addition, if you continue to pay premiums on a policy that we own, you can deduct the premium payments.

Life Income Gifts
Life income gifts allow you to receive an income as a result of
making a charitable gift. Depending upon the plan you choose, the income can be fixed or variable as can be
for you or other beneficiaries you choose. For example, you might
create a charitable remainder trust to pay income to you for life and contribute money, stock or other property to it. Once placed in the trust, the assets can be sold (without capital gains tax) and the proceeds reinvested to produce a higher yield. Life income gifts entitle you to an immediate income tax deduction, which is based upon the present value of your gift to us.

Gifts of Real Estate
If you own property that is not subject to a mortgage and has appreciated in value, a charitable gift may be an attractive option. You can claim an income tax deduction based upon the fair market value of the property, avoid all capital gains taxes and remove that asset from your taxable estate. Or, you can transfer your home or farm to us now and continue to use the property for life. Due to the complexities involved, we encourage you to contact us to discuss any gift of real estate.

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