Options for Giving—Current Gifts

Cash Gifts

• Tax deductible if donor itemizes deductions.
• Up to 50 percent of adjusted gross income can be deducted in any one year.
• Excess can be deducted over the next five years.
• Actual savings depend on tax rate.
• The higher the tax rate, the greater the savings.

Pledges

• Payable over a three to five-year period.
• Deductible in the year a payment is made.

Matching Gifts

• Takes advantage of programs offered by many employers.
• Leverages donor's gift to a higher level.

Appreciated Property

• If qualified as a long-term capital asset (a year and a day), property should be given outright.
• Avoids payment of capital gains tax due if property were sold.
• Deduction given for full value of property, limited to 30 percent of adjusted gross income.
• Excess beyond 30 percent can be carried forward for five years.

Property That Has Lost Value

• Donor sells the property, takes loss for tax purposes, then contributes the cash received from sale.
• Deduction given from both the loss and the charitable gift.

Closely Held Stock

• Produces a current tax deduction equal to fair market value of the stock.
• Corporation may redeem shares of the stock from your institution.
• Could reduce liability for accumulated earnings tax.

Real Estate

• Possible for donor to make gift of residence, farm, or vacation home, reserving right of occupancy as long as donor and spouse live.
• Irrevocable gift qualifies for immediate tax deduction based on present value of remainder interest.
• Assign directly to the organization or, preferably, transfer through broker.
• Amount of contribution is fair market value on the date of transfer.