IRS information on Charitable contributions..Laws , deductions etc on cars,boats,real estate, and much more….IRS PDF
Simple and Not-So-Simple Gifts
There’s More Than One Way to Help The Shelter
The easiest way to help the Mission Possible Homeless Shelter is to write a check. Whatever its size and whatever its purpose, you make a difference. However, other giving mechanisms may be better suited to a donor’s personal and philanthropic goals. What follows is an overview of the options available for benefiting The Shelter and its programs for the future.
Outright Gifts
Outright gifts include contributions of cash, securities, and written pledges. Checks should be made payable to The Shelter. Any special designation of the purpose of the gift should be indicated in an accompanying letter or on the lower left corner of the check.
Pledges are usually paid within five years. Gifts of securities are credited at market value on the date The Shelter gains control of the assets. Matching gifts from a donor’s employer are credited to the donor.
Gifts of Real Estate
Real estate may be contributed as an outright gift or to finance a planned gift, such as a charitable trust that provides income for the donor and that eventually will benefit The Shelter. There is a range of options available, such as a retained life estate. This allows the donor to continue to use the property for a certain number of years or for the donor’s lifetime. Other arrangements offer special tax advantages and lifetime income.
Gifts of real estate, such as undeveloped land, a residence, a vacation home, a farm or commercial property, should be arranged through your financial advisors. The Shelter asks the donor to bear certain costs when making a real estate gift, such as that of an appraisal to determine fair market value. Also, The Shelter deducts transaction costs from the proceeds of the sale of the property, including closing costs, title insurance, and a survey (if needed) and any taxes due before the gift is completed.
Gifts of Personal Property
Gifts of personal property, works of art, manuscripts, rare books, antique furnishings are also encouraged. An outside expert must appraise such gifts unless an item has an apparent value of less than $5,000.
Planned Gifts
Planned gifts include bequests, gift annuities, pooled-income fund contributions, various types of trusts, retirement plan designations, and gifts of life insurance. Because of their tax advantages, planned gifts allow donors to meet their personal financial objectives and to benefit The Shelter in significant ways. They may be directed to any program; or they may be left unrestricted to give The Shelter the flexibility to meet needs that can’t be foreseen today.
Gift Annuities
A gift annuity is both a charitable contribution and an investment. Funded with a gift of cash or readily marketable securities, the annuity provides guaranteed fixed income for the donor’s lifetime and/or for the lifetime of the donor’s spouse or another beneficiary. After that, the assets in the annuity become available to The Shelter. The income may be deferred to help fund the donor’s retirement or to cover a child’s college expenses. When the annuity is created, the donor receives a charitable tax deduction that can be carried over an additional five years. If the annuity is funded with appreciated securities, the donor pays no capital gains taxes at the time of the gift; a portion of the capital gains tax due is spread over the lifetime of the annuity. What’s more, part of the annuity income is often tax-free, since it is considered a return of principal.
Charitable Remainder Trusts
By creating a charitable remainder trust, the donor receives attractive financial benefits while making a significant gift commitment to The Shelter. If The Shelter serves as trustee, the minimum gift for a charitable remainder trust is $50,000, which may be funded with cash, readily marketable securities, real estate or closely held stock. The trust generates a stream of income that is fixed or (depending on the donor’s preference) that fluctuates with market conditions and the growth of the trust. Income may continue through the donor’s lifetime, through the lifetime of the donor’s spouse or other beneficiaries, or for a set term of up to 20 years. The donor receives a substantial charitable tax deduction and will probably bypass capital gains taxes if the trust is funded with appreciated property or securities.
Charitable Lead Trusts
For the donor who wishes to benefit The Shelter but also wants to pass assets on to children or other family members, the charitable lead trust may be the best option. In a sense, the donor is lending funds to The Shelter to generate investment income for its programs. A lead trust can be created with a gift of at least $100,000 in the form of cash or readily marketable securities. The Shelter receives the investment income from these assets for a set term of years or the lifetime of the donor. The funds are then returned to the donor or are passed on to the donor’s beneficiaries. The latter arrangement reduces gift taxes and decreases the federal tax exposure for the donor’s estate.
Giving Through a Retirement Plan
A donor can make a deferred gift by naming The Shelter the beneficiary of his or her retirement plan. Or the donor may use the assets in a retirement plan to fund a charitable trust that will benefit the donor’s spouse and eventually The Shelter. Retirement plans are a desirable means of making charitable gifts because of the excessive tax burden associated with passing these assets on to noncharitable recipients.
Giving by Bequest
For many donors, a bequest is the most significant gift they can make to The Shelter. Through a provision in the donor’s will, a gift in the form of cash, securities, real estate or personal property can be directed to The Shelter. This removes assets from the donor’s estate and reduces its exposure to federal taxes.
Since it is difficult to predict The Shelter’s priorities in future decades, donors are encouraged to leave all or a portion of their bequests unrestricted to give The Shelter the greatest flexibility to meet future needs. Friends who have included The Shelter in their wills are asked to inform The Shelter’s President of their decisions. This allows The Shelter to recognize and thank our friends for their foresight and generosity.
Giving With Life Insurance
Life insurance can be a convenient and cost-effective means of making a substantial gift for the future of The Shelter. Gift opportunities range from naming The Shelter as owner and beneficiary of a paid-up policy to using life insurance to replace assets given to The Shelter. Under the latter arrangement, the donor makes a significant gift to The Shelter and uses the tax savings to purchase a life insurance policy. The policy will replace the contributed funds for the future of the donor’s family.
Consult Your Advisors
With the help of your financial and legal advisors the Mission Possible Homeless Shelter will do all we can to help facilitate a plan that will work for you and The Shelter.