Originally published on 10/11’s Pure Nebraska program
Nebraskans cherish their communities and want to see them thrive. They invest time, talent and treasure into building a brighter future for everyone. Research confirms that sentiment. AmeriCorps’ 2019 Volunteering in America survey notes that 589,714 volunteers in Nebraska contributed 53.8 million hours of service to the places and projects they are passionate about. More than 40% of Nebraskans volunteer, and more than a third participate in local groups or organizations.
At Nebraska Community Foundation, the generosity of Nebraskans at work is seen every day. In just five years, NCF received 46,653 contributions from people who believe in the future of Greater Nebraska, whether or not they continue to live there today. Together they’ve built endowments totaling $138 million—that’s capital that will fuel progress in the future and create the kind of quality of life that will attract young families to Nebraska hometowns.
Most Nebraskans don’t hesitate to reach for their wallets when asked to make a gift to support their communities. But when it comes to making a larger gift, thinking beyond cash can help make an even greater impact, and provide tax benefits. Here are just a few assets to consider when making end of year charitable gifts.
IRA Charitable Rollover: If you are over the age of 70 1/2, you may make a qualified charitable distribution up to $100,000 from an IRA to a charity without paying taxes on the distribution. The gift may also qualify as your required minimum distribution. This is like receiving a 100% tax deduction.
Appreciated Stocks or Mutual Funds: Making gifts of stocks or mutual funds that have increased in value since purchase has several benefits. First, if you have owned the asset for more than one year, it can be deducted at its current market value. Second, the sale of appreciated stocks or mutual funds generates a capital gain upon which you are taxed. However, when you make a charitable gift of the stocks or mutual funds you pay no capital gains tax.
Grain or Livestock: A gift of grain or livestock allows farmers and ranchers to avoid claiming the sale price of the commodity as income and deduct the cost of production as a business expense. In other words, the gift can be made completely tax-free. Real Estate: A gift of real estate that has increased in value since you have owned it has several benefits. First, if you have owned the property for more than one year, the gift of real estate can be deducted at its current market value. Second, the sale of the appreciated real estate generates a capital gain upon which you are taxed. However, when you make a charitable gift of the real estate, you pay no capital gains tax when it is sold by the charity.
Paid-up Life Insurance Policy: By naming charity the owner and beneficiary of a paid-up life insurance policy, you will be able to receive a current income tax deduction. The income tax deduction is approximately equal to the policy’s cash value or the premiums paid, if less. Or, name a favorite charitable organization or community foundation as the beneficiary of the policy. Keep in mind, that Nebraska Community Foundation has an abundance of free information on charitable giving that doesn’t involve writing a check available at https://nebcommfound.giftlegacy.com.
NCF always advises that you to speak with your professional advisor about the giving method that is best for your specific circumstances.