Gifts of cash are the most common form of contribution to
Cedar Crest College. A gift of cash is easy to do, and the gift is
not subject to gift or estate taxation. A contribution postmarked
in December is deductible for that tax year even if the College
receives it in January, provided the account against which the
check was written had sufficient funds to cover it in December.
Gifts of cash are fully deductible up to 50% of your adjusted
gross income (AGI). If the cash gift is large enough to exceed 50%
of your AGI in the year of the gift, the remaining amount of the
gift may be carried over and used as a deduction for up to 50% of
your AGI until the gift amount is exhausted or up to five years,
whichever comes first. The gift amount is removed from your estate.
Gifts of appreciated stocks or bonds have the same positive benefit to the College as a gift of cash--however, a gift of securities is usually more beneficial to you, the donor, than a gift of cash. With a gift of marketable securities which have been held longer than one year, you receive a charitable deduction of the full fair market value (FMV) of the securities. The FMV is determined by the average of the high and low sales prices of the stocks on the gift date. You may apply the gift as a deduction up to 30% of your adjusted gross income (AGI) in the case of securities, with the same five-year carry-over provision--and avoid gift and estate taxation, as with gifts of cash. In addition, you avoid paying any taxes on capital gains on the appreciation in the value of the securities. This can be a major benefit if you have held securities over a number of years and if they have grown in value.
The rules for gifts of real estate are essentially the same as
for gifts of securities. Any real estate may be donated. You
receive a
charitable deduction for the full fair market value of the
unencumbered real estate. You may apply the deduction up to 30%
of your AGI in the year of the gift with the five-year carry-over
provision. You avoid capital gains taxes on the appreciation
you
have in the property. There are no gift taxes, and you have removed
the property from your estate, thereby reducing your estate taxes.
Almost any type of real estate may be contributed: undeveloped
land, farms, commercial buildings, vacation homes, or your
residence.
Potential gifts of real estate are evaluated by Cedar Crest
College on a case-by-case basis before acceptance. The College
must consider insurance, environmental, maintenance, property
tax
liability, and other potential risk factors,
including special tax provisions which apply to certain types
of real estate.
Books, art, antiques, precious stones, gems, and coin or
stamp collections, as well as equipment or other items which
can be put to use immediately - such as computer equipment -
are
considered tangible personal property. These donated items must
have been held for over a year. There are two main categories
of
tangible personal property:
Items related to the College's purpose, and
Items not related to the College's purpose.
Gifts of related-use items allow the donor an income tax
charitable deduction of the appraised value of the gift on the date
of the gift (up to 30% of the donor's adjusted gross income with
the five-year carry-over provision).
Gifts of unrelated items allow the donor a deduction only of the
item's cost basis. Every potential gift item of tangible personal
property is evaluated on an item-by-item basis by the College's
Gift Planning Office to determine if it is related-use property.
Please consider a gift of cash or securities to provide for the
maintenance of special collections.
Bargain sales are sales of property, such as securities or real estate, to Cedar Crest College for less than the full fair market value. A bargain sale consists of a sale portion and a gift portion. Usually, Cedar Crest pays you an amount equal to your cost basis in the asset. This way you are able to recover your original investment. A portion of the appreciation of the asset is considered a gift to the College, and you receive a tax deduction for this amount. You will owe taxes only on the part of the gain attributable to the bargain sale. The gain to be recognized is determined by dividing the selling price to Cedar Crest College by the fair market value, then multiplying that result by the total gain in value.
A donor creates a Charitable Lead Trust by transferring ownership
of an asset to a trust. The trust gives the income, or a percentage
of the income, to Cedar Crest College each year for a period
of years (usually 10-20). At the end of the period of years,
the trust
assets are given back to the donor or to named beneficiaries.
The lead trust typically is used with assets with a potential
for
continued high appreciation. The trust permits the assets to
be transferred to other family members at a low transfer cost.
Utilizing the lead trust, the donor may leave a significantly
larger inheritance to her heirs than she could have left via
a will
or other trusts.
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