Giving a gift of long-term appreciated property such as real estate or securities makes good sense from both a philanthropic and financial-planning standpoint.
#1: You may deduct the current market value of the asset given for income tax purposes.You may deduct the full market value of the gift to qualifying organizations such as the Women’s Resource Center, not just the amount you paid.
#2: You can claim deductions over six years. Up to 30% of your adjusted gross income may be deducted in any one year. Unused deductions can be carried over for another five years.
#3: You can bypass capital gains tax. Your charitable gifts are not subject to capital gains tax.
#4: You can increase cash flow. Charitable programs and strategies may increase your retirement income cash flow if you contribute low-yielding securities.
Gifting of Appreciated Stock
Appreciated stock is an excellent asset to use for making gifts to charity that result in substantial savings. Under current tax law, direct transfers of stock to qualified charitable organizations remove capital gains tax liability that you would otherwise owe if you sold the stock.
In addition, if you have held the stock for longer than one year, you are eligible for a charitable income tax deduction equal to the fair market value of the stock on the date of transfer.
Stock can be used for funding any type of charitable gift, including deferred-giving arrangements that may provide a higher level of income than low-yielding securities.
Gifting of Real Estate
A gift of real estate may consist of a full or partial interest in almost any kind of property, including a residence, vacation home, farm, ranch, condominium, commercial property, or undeveloped land. These gifts can provide significant tax and financial advantages, while helping to support programs and services that enhance the quality of care at the Women’s Resource Center.
The use of charitable trusts for gifts of real estate provide a variety of exciting opportunities to benefit donors and can be used to produce an income stream, secure a substantial tax deduction, provide estate-tax savings, and avoid capital gain tax on appreciation.
If you are interested in knowing how the gifting of appreciated property might benefit you, give Marva Bledsoe a call at (760) 757-3500.