Careful planning now can mean a nice gift from Uncle Sam when it's tax time next spring! The federal government encourages charitable giving by providing some significant tax benefits when you make a gift to Southeastern Community College Foundation.
Your gift may be made in a number of ways, depending on the specifics of your situation. Careful planning today can maximize your future benefits. Here are some tips that may be helpful as you consider the best way to make your year-end gift.
Cash is still the most popular way to make a charitable gift. The IRS recognizes the contribution nonprofit organizations such as the SCC Foundation make to society, and offers tax deductions to encourage individuals to contribute to charitable causes. Your gift of cash to the Southeastern Community College Foundation prior to December 31 could save you money at tax filing time. For example, if you make a $2,800 gift before December 31 and are in the 28% marginal tax bracket, your gift could save you up to $560 in taxes.
Gifts of appreciated securities or stock can be one of the most advantageous methods of giving. If the gift of stock is one you have owned for more than one year, you may deduct the full fair market value of the stock as a charitable contribution. In so doing, you bypass all capital gains taxes.
Gifts of appreciated real estate also help you avoid capital gains taxes. If you have owned your real estate for more than one year, you may deduct the fair market value of the property as a charitable contribution.
Life insurance offers a unique opportunity for charitable giving. To qualify, you simply designate the SCC Foundation as the sole owner and beneficiary of the policy. No incidents of ownership should be retained. If the policy is paid in full, your charitable contribution is generally the replacement value or cost basis of the policy, whichever is less. If you pay ongoing premiums on a gifted life insurance policy, your premiums can also qualify as charitable deductions.
Gifts of tangible personal property which are related to the stated purposes of the SCC Foundation are fully tax deductible at fair market value. Gifts of tangible personal property which are not related to the tax-exempt purposes of the Foundation are limited to cost basis for determining your tax deduction.
A unitrust offers a unique method for giving, providing substantial tax savings while providing an annual income for you or your family. The unitrust is funded with an assetâ€”appreciated property or securities are usually best. Within the unitrust, the assets can be sold and the proceeds reinvested to produce a greater yield for the donor or beneficiary. The income stream is a fixed percentage (not less than five percent) of the net asset value of the trust, which is valued at least annually. As the value of the trust increases, so does the payout of income, providing a hedge against inflation.
Immediate benefits of a unitrust include:
By making a gift annuity to Southeastern Community College Foundation, you can receive a lifetime income that is a percentage of your gift. If funded with appreciated assets, you also get a tax deduction, tax-free return of principal, and deferred capital gains tax. You also have the satisfaction of knowing that your gift will help SCC both now and in the future.
This information is printed solely for educational purposes. If youâ€™d like more information, weâ€™ll be pleased to help. For specific recommendations, consult your professional financial advisor.
For more information on charitable giving, contact:
Southeastern Community College Foundation
1500 West Agency
P O Box 180
West Burlington, Iowa
866-SCC-IOWA (866-722-4692) or