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Securities
Gifts of appreciated securities offer important tax advantages, since their full fair market value is deductible as a charitable contribution up to 30% of your adjusted gross income each year when you itemize deductions. Like gifts of cash, deduction amounts that exceed the limit can be carried forward for up to five additional years. You do not have to pay federal or state capital gains taxes on the appreciated portion of the gift.
After the Foundation liquidates the securities, the full value of the gift is available to support your charitable goals. The date of the gift is the date your letter is postmarked or delivered to us in person.
Send us, in a separate envelope, a signed Irrevocable Stock/Bond Power Form. Please do not mail the certificates and Irrevocable Stock/Bond form together, as the certificates would be negotiable.
Typically the Foundation utilizes the services of Merrill Lynch to sell donated securities. If you prefer to use your own brokerage firm and broker, we will need to know the name of the stock, number of shares, and the name and contact information for the broker handling the transaction. We will work with your broker to complete the transaction.
Closely Held Stock
These are shares in a privately owned business. Family members, top management, and the corporation itself usually own the shares. The stock can be contributed outright to the Foundation, and as a donor, you are entitled to a deduction for the appraised fair market value, up to 30 percent of your adjusted gross income.
Mutual Funds
Mutual funds can also be contributed to the Foundation. You generally receive a tax deduction based on the value of the mutual fund at its price on the day you make the gift.
Please note that transferring share in mutual funds can involve unanticipated delays, so be sure to allow adequate time for the transaction to be completed. When considering gifts of mutual funds, please contact the Foundation office.
Real Estate
DCCF can accept a gift of a house or other personal residence, farm, commercial buildings, and income-producing or non-income-producing land. A gift of real estate that you have owned for more than a year entitles you to the same federal tax advantages as those for gifts of securities—a tax deduction for the fair market value of the property—while allowing you to avoid paying capital gains tax. The Foundation can accept most unencumbered real property gifts.
Personal Property
The Foundation will consider gifts of personal property, such as artwork and jewelry. This type of gift must be discussed individually in advance, so please contact the Foundation office ahead of time.
Bequests
Naming the Foundation in your will or living trust is a popular way to support the community. A charitable bequest can be a specific dollar amount, a percentage of your estate, or what remains after other bequests—including those to family members—are made. Your will can specify that your heirs receive lifetime income from your estate, with the remainder going to the Foundation for charitable purposes.
If you choose, the bequest can flow into a donor-advised fund for your children to carry on your family’s philanthropy.
I give, devise, and bequeath to the Douglas County Community Foundation the sum of _________dollars ($_____________)
OR
the following described property, to wit:_____________________
_____________________________________________________
OR
________percent (____%) of the rest, residue, and remainder of my estate to the ____________________________ (name of fund).
I instruct that all of my charitable gifts, bequests, and devises shall be made, to the extent possible, from property that constitutes income in respect of a decedent as that term is defined in the Internal Revenue Code.
Retirement Plan Assets
For a gift through your estate, retirement plan assets are often the best to give because they are so heavily taxed if left to heirs. Income and estate taxes can easily consume over 65% of the account balance at death. By naming the Foundation as the remainder beneficiary of these assets, you can leave a very efficient legacy.
Life Insurance
For those whose need for life insurance has decreased, making a gift of an unneeded policy can be a convenient and effective way of meeting your charitable goals. When you transfer ownership of a cash value policy to the Foundation, you become eligible for a charitable tax deduction based on its current value.
You can take advantage of several strategies designed to help you make charitable gifts while enjoying tax benefits and preserving economic security for yourself and your loved ones. Some examples are:
Charitable Remainder Trust
This trust agreement allows you to receive income (or provide income for another person) with the knowledge that the funds remaining when the trust terminates will be used to support your charitable interests. The donor transfers assets such as marketable securities, real estate or cash to the trust, to be managed by the trustee (yourself or a trustee of your choosing).
- Each year income from the assets in the trust is paid to you or other beneficiaries that you name.
- Since you have made a gift that will ultimately be distributed to charity, you receive an income tax-deduction in the year the trust is funded.
- Payments continue until the trust "matures." The trust document determines when this will happen. It could be at the death of the last beneficiary or after a stated period of years.
- When the trust matures, the remaining assets become a gift to the Foundation.
- These trusts can be designed to pay either a fixed, unchanging income or a fluctuating income that will vary with the performance of the trust assets.
Retained Life Estates
This agreement ensures that you or another person have lifetime security to live in a home that is given to the Foundation as a charitable contribution.
Charitable Gift Annuities
A gift annuity is a contract between the donor and DCCF that provides advantages for both. The donor makes a gift of at least $5,000 to the Foundation and receives the following benefits:
- Guaranteed fixed payments for life, a portion of which is nontaxable
- Charitable income tax deduction for a portion of the gift
- Reduced capital gains taxes (if funded with appreciated assets)
- The payout rate on an annuity is based on the age of the donor(s) at the time the gift is made.
Deferred Gift Annuity
As the name implies, a deferred gift annuity is useful for those who need to benefit from a current income tax deduction, while deferring income until some point in the future (usually at retirement). The amount you receive each year (rate of return) depends upon your age now and your age when the payments are set to start.
Charitable Remainder Unitrust
This trust provides income that fluctuates with the value of the trust assets. When the trust is established, you determine the annual percentage that will be paid. Each year this percentage of the value of the assets in the trust is distributed to you or others that you have selected. When the value of the investments is higher, more income is received. The income will be less if the value of the trust assets decline. Additions can be made to the trust and a tax-deduction is allowed for part of each addition.
Charitable Remainder Annuity Trust
This trust pays a fixed percentage (at least 5 percent) of the initial value of the trust at least once a year. The payout is constant regardless of fluctuation in the value or trust earnings. In an annuity trust, if trust earnings are insufficient to make the required payments in any year, the difference is paid from trust principal.
The major benefits of an annuity trust include:
- Bypassing of potential capital gains
- Fixed income
- Higher income
- An income-tax deduction that can reduce current income taxes
The annuity trust is frequently funded with highly appreciated low-yield stocks, municipal bonds or cash.
Revocable Living Trust
This trust is especially appropriate for a person who wishes to retain full control of property during life and still receive a charitable estate tax deduction for the value of property at their death. In addition, because living trusts avoid probate, they can offer substantial savings in estate administration costs. The process of distributing assets is also more rapid.
- The donor creates a trust with the help of an appropriate advisor
- The donor transfers assets to the trust. (Since the trust is revocable it may be changed or canceled at any time.)
- As trustee, the donor invests and manages trust assets as the trust document directs
- The trustee distributes principal and income during the life of the trust holder
- The final distribution of assets is made when the trust terminates
Wealth Replacement Trusts
These trusts are funded with life insurance to replace the value of asset that has been given to DCCF. |
