|
| ||
|
- About Us - Events Calendar - Programs MLH - Home - Building Project - Staff Directory - Employees Only |
Securities
A Perfect Idea For Friends Who Say:
Why Are Gifts of Appreciated Assets So Valuable? Why? Donors receive a two-fold tax benefit: Not only can they deduct the full fair market value (FMV) of the appreciated assets, if owned more than one year, they also save by avoiding all capital gains taxes on any "paper profit." For example, say an individual purchased stock in 1985 for $200 which is now worth $1,000. If this person makes a gift of the stock instead of cash, MHDF would receive a gift worth $1,000 – the fair market value of the stock – and the donor can claim a $1,000 charitable deduction on their next income tax return. For a taxpayer in the 33% tax bracket, this amounts to a tax savings of $330. Furthermore, the donor avoids $120 in capital gains taxes that would have been due whenever the stock was sold. By including tax savings, a gift worth $1,000 to MHDF would cost the donor only $550. The following table shows the tax savings resulting from gifts of securities in various amounts, assuming a 15% capital gains tax rate and that the stock has doubled in value.
Planning Techniques for Gifts The tax deduction for a gift of appreciated securities is always the FMV of the securities on the day the gift is made. For actively traded securities, FMV is the calculated mean (average) between the highest and lowest quoted sales price on that date. Timing is critical. The date of the gift is the day a properly endorsed stock certificate is hand-delivered to us, or the date an unendorsed stock certificate is mailed to us. The latter must be accompanied by a signed "stock power," mailed separately. If you mail your gift on a high value day, this means you qualify for a larger tax deduction. If the stock you plan to contribute is held in "street name" (in a brokerage account), please have you broker contact our office immediately. In this case, the gift is effective, for tax purposes, on the date the stock is actually transferred into our account. Don’t overlook mutual funds. Gifts of mutual fund shares provide the same tax benefits as listed, actively-traded stock. The FMV of the deduction for mutual funds is the public redemption value of the shares. Capital loss stock. Gifts of stock that have decreased or lost value are still valuable, both for you and MHDF. Simply sell the stock and contribute the proceeds. You will receive a gift deduction as well as a capital loss deduction on your income tax. Generate Income for Life - And Make An Important GiftPerhaps you cannot, at this time, give appreciated assets to MHDF. You may not currently own any or you may not be in a position to make such a substantial gift. In this case, we ask that you consider making a bequest to MHDF in your will. Please remember that every dollar we receive completely escapes federal estate tax. You can give appreciated securities right now and still retain the income from the assets for as long as you live. We would not receive the property until after your death. But you will receive an income tax deduction this year for the value of what you have given to us in the future. Plus, you minimize capital gains tax on your paper profit, even if we sell the gift property to invest in higher yield securities. Deferred gifts of appreciated securities may be made in several forms. Whichever form is chosen offers clear benefits:
How to Make a Gift of Securities Send separately a signed "stock power" form for each certificate, which includes the name of the issue, and the signature guaranteed by a broker or officer of a national bank. It is advisable to sign a blank stock power without filling in our name; this permits us to sell the stock quickly. If the certificates are held in their "street name" in a brokerage account, please have your broker contact us for instructions. For more information, please contact us.
Minnewaska Lutheran Home
The information provides is not intended as legal, tax, or investment advice. Please consult
an attorney, tax or financial planning professional for questions specific to your financial
situation. |
Basics Ways To Give What To Give Additional Info Glossary of Terms Gift Calculator Information for Professional Advisors | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| |