There’s a particular thrill when, after hours of searching, you discover that item, act or experience that you know will brighten someone’s day. The perfect gift is more than a present, it’s an act of appreciation and an indication of your dedication to understanding and cherishing the most important people in your life.
Family, significant others and friends naturally find their way to our shopping lists. But places can also receive gifts, and at Nebraska Community Foundation we encourage people across our state to consider their hometowns during the gift-giving season. Our organizational history is teeming with examples of people who embraced this idea. Most recently, I think of James Lee, whose $5 million estate gift to multiple McCook-area organizations will benefit the area for the foreseeable future. Lee saw McCook as more than a dot on a map. To him, the community was an integral member of his family.
When asked to make a gift to support the communities and causes near to our hearts, most of us wouldn’t hesitate to reach for our wallets. When it comes to making a larger gift, however, thinking beyond cash can help us make an even greater impact—not to mention provide tax benefits. Here are just a few assets that you may consider as you make your end of year charitable gifts. Perhaps one of them is the perfect present for the place you love.
Charitable IRA Rollover: If you are over the age of 70½, 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 Securities: Making gifts of appreciated securities has several benefits. First, if you have owned the security for more than one year, it can be deducted at its current fair market value. Second, a sale of appreciated securities generates taxable gain. However, when you make a charitable gift of securities, you pay no capital gains tax.
Grain/Livestock: A gift of commodities allows a farmer or rancher to avoid claiming the sale price of the commodity as income and to deduct the cost of production as a business expense.
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 appreciated real estate generates a taxable capital gain. However, when you make a charitable gift of the real estate, you pay no capital gains tax when it is sold by the charity.
Closely Held Stock: Transferring business ownership, either at retirement or as an inheritance, offers unique opportunities and benefits of charitable giving. Not only does transferring your stock bypass capital gains and provide a charitable deduction, it also allows the corporation to buy back the stock.
Paid-Up Life Insurance Policy: By naming a 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, if less, the premiums paid. Or name a favorite charitable organization or community fund as the beneficiary of a policy.
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. We always advise speaking with your professional advisor about the giving method that is best for your specific circumstances.