Making a Difference That Lasts — and Lasts
Planning a gift to Volunteers of America Northern New England?
“If so,” says Pat Murtagh, Vice President of External Relations for the organization. “why not supercharge your giving through tax-advantaged non-cash gifts? Taxwise, gifts of stock, real estate, or other assets that have gone up in value are the hands-down winners.”
Why? Because donors receive a double tax benefit on their gift: They can deduct the full fair market value of the appreciated assets (if held for more than a year), not just what they paid originally. Then they can avoid capital gains taxes on the “paper profit.”
Pat says, “Actually, there are lots of ways you can enjoy these benefits and leave a legacy of compassion and care through thoughtful gift planning.” Here are three:
[1] Gifts of appreciated stock are a popular alternative to making a cash gift, because they offer added tax advantages. In addition to receiving an income tax deduction for the full market value of the securities, you can also avoid capital gains on the appreciation of the stocks. If the donated securities are used to fund a charitable trust or gift annuity, there can be estate and gift tax advantages as well. To make such a gift, do not sell the stock and donate the proceeds; this will jeopardize the tax benefits. Instead, notify your broker of your intention and contact Pat (see the end of this article). Please be prepared to give Pat your broker’s name and telephone number, the name of the stock, and the number of shares you wish to contribute. We will then contact your broker. You will be notified of the contribution deduction based on the date of the stock transfer.
- [2] Real estate gifts have real advantages. Real estate can be contributed to Volunteers of America with the same advantages as stocks:
- Reduced income taxes and estate taxes
- Reduced property taxes
- Elimination of insurance and upkeep costs
- Avoidance of capital gains taxes
- Financial security for loved ones
- Increased lifetime income
- Continued use of the contributed property
Generally, a gift of real estate entitles you to an income tax deduction equal to the full value of the property contributed. In addition, you can avoid capital gains taxes on the profit that would have been taxable if the property had been sold. You might also save on estate taxes, because a lifetime gift of real estate removes the property from your taxable estate; the property can even be placed in a trust that pays you income for life.
- [3] Lifetime-use gifts of property let you continue to use your home, vacation home, or agricultural property for as long as you wish while giving you an immediate income tax deduction. To make a lifetime-use gift, simply give Volunteers of America the property, retaining the right to use it for life (including receiving income from a farm). After your death, the property passes to us.
“Gifts like these benefit all parties,” says Pat, “helping you manage your personal financial plan, extending your ability to help others for generations to come, and making the world a better place for your children and grandchildren — by continuing the good work of Volunteers of America. However, these gifts definitely call for special planning.”
To learn more, please get in touch with Pat Murtagh today at pat.murtagh@voanne.org or 207-373-1140 ext. 221.