Gift of Education
Careful planning today can maximize your future benefits. Here are some tips that may be helpful as you consider the best way to make your year-end gift.
The IRS recognizes the contribution nonprofit organizations such as the SCC Foundation make to society, and offers tax deductions to encourage individuals to contribute to charitable causes. Your gift of cash to the SCC Foundation before December 31 could save you money at tax filing time.
For example, if you make a $2,800 gift before December 31 and are in the 28% marginal tax bracket, your gift could save you up to $560 in taxes.
Gifts of appreciated securities or stock are one of the most advantageous methods of giving. If the gift of stock is one you have owned for more than one year, you may deduct the full fair market value of the stock as a charitable contribution. In so doing, you bypass all capital gains taxes.
Gifts of appreciated real estate also help you avoid capital gains taxes. If you have owned your real estate for more than one year, you may deduct the fair market value of the property as a charitable contribution.
Life insurance offers a unique opportunity for charitable giving. To qualify, you simply designate the SCC Foundation as the sole owner and beneficiary of the policy. No incidents of ownership should be retained. If the policy is paid in full, your charitable contribution is generally the replacement value or cost basis of the policy, whichever is less.
If you pay ongoing premiums on a gifted life insurance policy, your premiums can also qualify as charitable deductions.
Gifts of tangible personal property which are related to the stated purposes of the SCC Foundation are fully tax deductible at fair market value. Gifts of tangible personal property which are not related to the tax-exempt purposes of the Foundation are limited to cost basis for determining your tax deduction.
A unitrust offers a unique method for giving, providing substantial tax savings while providing an annual income for you or your family. The unitrust is funded with an asset-appreciated property or securities are usually best. Within the unitrust, assets can be sold and the proceeds reinvested to produce a greater yield for the donor or beneficiary.
The income stream is a fixed percentage (not less than five percent) of the net asset value of the trust, which is valued at least annually. As the value of the trust increases, so does the payout of income, providing a hedge against inflation.
Immediate benefits of a unitrust include:
- Current income tax deduction.
- Bypassing capital gains taxes.
- Potential for increasing income.
By making a gift annuity to Southeastern Community College Foundation, you can receive a lifetime income that is a percentage of your gift. If funded with appreciated assets, you also get a tax deduction, tax-free return of principal, and deferred capital gains tax. You also have the satisfaction of knowing that your gift will help SCC both now and in the future.
This information is printed solely for educational purposes. If you would like more information, we will be pleased to help. For specific recommendations, consult your professional financial advisor.
For more information on charitable giving, contact:
Rebecca Rump, Executive Secretary SCC Foundation
1500 West Agency P.O. Box 180
West Burlington, Iowa 52655-0180
(319) 208-5000 (866) 722-4692) or (319) 752-2731, ext. 8142